Starbucks shares drop after same-store sales around the world miss estimates

Starbucks (SBUX) shares dropped as much as 4 percent in late trading after it reported sales growth that missed analysts' expectations on Thursday.

The coffee chain said it saw global same-store sales increase by 4 percent during the quarter, below Wall Street expectations of 5.7 percent, according to FactSet. The company saw lackluster sales growth across all regions.

Starbucks saw comparable store sales increase by 4 percent in the Americas region, 3 percent in the China/Asia Pacific region and decrease by 1 percent in the Europe/Middle East/Africa region. Analysts had expected sales growth of 6.2 percent in the Americas, 4.6 percent in China/Asia Pacific, and 2.8 percent in Europe/Middle East/Africa.

CEO Howard Schultz said that the company has a "clear line of sight to returning our U.S. business to historic levels of comp sales growth which had been at or above 5% for the 25 consecutive quarters prior to Q3."

In particular, Schultz called the U.S. sales growth figure an "anomaly" during a conference call with investors and analysts.

"With candor and humility, we acknowledge that in certain areas we did not execute as well as we could have in the U.S. in Q3. Had we done so, we certainly would've reported stronger U.S. comps," he said.

The Starbucks CEO explained that the company had underestimated the "interdependence of Starbucks Rewards and Happy Hour." The coffee chain recently revamped its loyalty program to a spending-based structure, a change which Schultz described as a "one-time event, a once in a decade change."

Schultz said that the buzz surrounding these "powerful initiatives" competed for "customer mindshare during a discrete period of time." He concluded that the company should have let the promotional program breathe a little.

Starbucks posted third-quarter earnings per share of 49 cents on $5.24 billion in revenue. Analysts expected the coffee chain to post earnings of 49 cents a share on $5.33 billion in revenue, according to a consensus estimate from Thomson Reuters.

The Seattle-based company said that its loyalty program grew 18 percent year-over-year to 12.3 million active members in the United States.

The coffee chain said it still sees adjusted full-year earnings of $1.88 to $1.89 a share. For the current quarter, Starbucks said it expects adjusted earnings between 54 cents and 55 cents a share.

Starbucks also slightly lowered its sales forecast and said it now expects full-year sales growth to rise at a mid-single digit percentage rate. Starbucks previously expected full-year sales growth to come in somewhat above the mid-single digits.

Last week, Starbucks said it will raise the wages of workers at its company-operated U.S. locations this fall, following accusations of cutting employee hours. Schultz said that workers can expect at least a 5 percent base pay increase, effective Oct. 3.

The coffee chain recently raised the price of its beverages. Shoppers now drop another 10 cents to 20 cents for each espresso beverage; tea latte prices increased by 10 cents to 30 cents each. The company said it expects the price of an average order to increase by about 1 percent as a result of the price hikes.

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