Nov. 3 (UPI) — Starbucks announced Thursday it’s selling its Tazo tea brand to Unilever after reporting lower-than-expected revenue for the fourth quarter.
The coffee company reported fourth-quarter revenue at $5.7 billion, slightly less than the same quarter in 2016, which was $5.71 billion. Wall Street analysts expected Starbucks to have about $5.81 billion in revenue.
The news sent Starbucks shares into a 3.13 percent decline in after-hours trading.
Starbucks said it is selling Tazo to Unilever for $384 million in order to focus more on developing its Teavana tea brand. In July, Starbucks announced it was closing all 379 Teavana locations due to poor sales.
Starbucks sold more than $1.6 billion in the Teavana brand in the past 12 months, compared to $112 million in sales for Tazo brand beverages.
“Over the past five years, we have established Teavana as our primary global brand focused on the premium tea segment. With our growth strategy for premium tea exclusively focused on Teavana, we are pleased to transition our Tazo business to Unilever,” said Kevin Johnson, president and chief executive officer of Starbucks. “We continue to see significant growth in our tea business through our Teavana brand, and this transition supports our strategy to elevate the premium tea experience for our customers.”
Starbucks purchased Tazo in 1999 for $8.1 million. The brand was founded in 1994.
In addition to Tazo, Unilever owns beverage brands Lipton and Brisk, both of which make tea products.