Jan. 26 (UPI) — Starbucks disclosed information on its lagging holiday sales this week, coinciding with the coffee chain trading down nearly 5 percent Friday.
The beverage company said same-store sales fell short in the company’s regions at the end of 2017, except in China — where sales rose 6 percent.
“Our holiday merchandise and limited-time offers did not perform up to expectations,” Kevin Johnson, CEO of Starbucks, told Bloomberg in an interview.
Johnson said the company’s new holiday products, including some gadgets and games, didn’t sell as well as they anticipated. Starbucks also offered seasonal drink flavors such as an Eggnog Latte and Chestnut Praline Chai Tea Latte to help draw in holiday customers.
Starbucks is also facing competition from other chains selling cheaper drinks, including McDonald’s, which recently began offering cappuccino, mocha and macchiato coffees for $2.
However, in the quarter that ended Dec. 31, Starbucks said its net income rose to $2.25 billion from $751.8 million a year ago.
The coffee chain said it added 1.4 million Starbucks Rewards members in the U.S. in the last quarter, raising its total number of members to 14.2 million.
Meanwhile, Starbucks’ revenues in China are quickly growing — with the country “leading the way” for the beverage company.
“China grew revenues 30 percent in Q1, with the strategic acquisition of East China positioning us to accelerate our growth in the key China market,” Johnson said in a company statement.
While sales in China were strong, the China and Asia Pacific region for Starbucks saw a sales growth of 1 percent. Scott Maw, the CFO of Starbucks, said that company figures in Japan were hurt by weak sales around Frappuccino offerings.
“We are laser-focused on accelerating growth in China and driving improvement across the U.S. business as we move into and through the back half of the year, and remain committed to delivering on the long-term targets we announced last quarter,” Maw said in a statement.
