By Austen Hufford 

Starbucks Corp. said it would sell its Tazo brand of teas in the coffee seller's latest move to focus on its core operations.

The company also on Thursday lowered its forecast for long-term profit growth, sending shares down 6.5% in post-market trading, as it also recorded same-store sales growth below its benchmark target and posted an unexpected revenue decline.

Starbucks now expects to have earnings per share growth of 12% or greater in the years to come. It had previously targeted 15% to 20% growth.

The sale of Tazo comes just months after Starbucks closed the last of its Teavana tea shops. Unilever PLC is paying $384 million for the Tazo brand, which is sold primarily in grocery and convenience stores.

Starbucks bought the brand for $8.1 million in 1991. The deal is expected to close later this year and Starbucks then plans to start selling packaged Teavana tea next year.

For its fourth quarter, the company had comparable-store sales growth of 2% globally, driven by increases in the average order price and the number of transactions.

The company reported a U.S. same-store sales increase of 2%, below the company's benchmark of 5% growth.

Hurricanes Harvey and Irma also cut into sales growth, shaving 1 percentage point off both global and U.S. growth.

Still, the company also reported success in its efforts to drive consumer habits through technology and perks. Membership in its rewards program grew 11% to 13.3 million in the U.S. as mobile orders reached 10% of transactions in U.S. company-operated stores.

Starbucks also reported some success in China, where it increased same-store sales by 8%, driven by a 7% increase in transactions. This year, the company has worked to increase its control over stores in the country.

In all for the quarter, the company reported revenue of $5.7 billion, down 0.2% from a year ago. It reported a profit of $788.5 million, or 54 cents a share, compared with $801 million, or 54 cents a share, in the year-ago period.

On an adjusted basis, earnings per share came in at 55 cents.

Analysts polled by Thomson Reuters had expected revenue of $5.8 billion and adjusted earnings per share of 55 cents.

Write to Austen Hufford at austen.hufford@wsj.com

 

(END) Dow Jones Newswires

November 02, 2017 17:05 ET (21:05 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
Grafico Azioni Unilever (EU:UNA)
Storico
Da Feb 2024 a Mar 2024 Clicca qui per i Grafici di Unilever
Grafico Azioni Unilever (EU:UNA)
Storico
Da Mar 2023 a Mar 2024 Clicca qui per i Grafici di Unilever