Starbucks to launch credit card, sell Tazo; sales disappoint

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by JOSEPH PISANI, AP Retail Writer

In this Tuesday, March 21, 2017, photograph, a lady walks previous a Starbucks espresso store in Sewickley, Pa. Starbucks Corp. studies earnings Thursday, Nov. 2, 2017. (AP Photo/Gene J. Puskar)

NEW YORK (AP) — 

Starbucks introduced offers Thursday to promote its Tazo tea model to Unilever and launch a bank card with Chase. But the espresso chain additionally reported disappointing fourth-quarter gross sales development at shops world wide, and its shares fell greater than three p.c in after-hours buying and selling.

The Seattle-based firm mentioned Unilever can pay $384 million for Tazo in a deal that’s anticipated to be accomplished within the subsequent yr. Unilever, which owns the Lipton and PG Tips tea manufacturers, referred to as the acquisition a “perfect strategic fit.” Starbucks, which purchased Tazo about 18 years in the past for $eight.1 million, mentioned it needs to give attention to its Teavana tea model. Although Starbucks has been shutting down stand-alone Teavana shops, it nonetheless sells its teas in shops.

The firm expects to launch a Starbucks-branded bank card with Chase this winter. A pay as you go card will come later. The firm mentioned each playing cards will permit clients to earn Starbucks rewards after they spend. Co-branded playing cards, which function the model of a financial institution and one other firm, have been common for many years since they badist strengthen buyer loyalty. Ride-hailing firm Uber, for instance, introduced a card with British financial institution Barclays final week.

Starbucks’ monetary outcomes, in the meantime, confirmed slowing development.

The chain mentioned fourth-quarter gross sales rose 2 p.c at its established areas worldwide, under the three.three p.c Wall Street badysts anticipated, in keeping with FactSet. During the identical interval a yr in the past, these gross sales grew four p.c.

Overall, the corporate reported web earnings of $788.5 million, or 54 cents per share, within the three months ending Oct. 1. Adjusted earnings got here to 55 cents per share, matching what badysts anticipated. In the identical interval a yr in the past, Starbucks reported web earnings of $801 million, or 54 cents per share.

Revenue slipped barely to $5.7 billion, falling wanting the $5.eight billion badysts anticipated.

Shares of Starbucks fell $1.82 to $53.05 after the inventory market closed Thursday.

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