SEATTLE — Starbucks Corp. has reported a 1-percent consolidated same-store sales increase for the company's first quarter, ended Dec. 30, 2007. The increase includes a 2-percent upsurge in the average value per transaction and a 1-percent transaction decline.
For the first quarter, U.S. comps decreased 1 percent due to a 3-percent decline in transactions, the company reported.
Meanwhile, the international segment posted a consolidated same-store sales increase of 5 percent for the quarter, which included a 3-percent increase in transactions and a 2-percent increase in the average value per transaction.
Consolidated company-operated retail revenues increased 17 percent to $2.4 billion, up from $2 billion for the same period last year. The increase was primarily driven by new-store openings in the United States and international markets, the company said. For the quarter, U.S. company-operated retail revenues increased 14 percent to $1.9 billion, while international company-operated retail revenues increased 33 percent to $461.2 million.
Net earnings for the period increased to $208 million, up from $205 million for the same period last year.
"Over the coming months, our management team will focus on building a long-term model to realize our transformation agenda, and drive long-term shareholder value. We will do that by being laser-focused on delivering what our customers want and expect, and providing our partners with the tools to help them exceed our customers' expectations," said Howard Schultz, Starbucks' chairman, president and CEO.
Store openings
Starbucks has slowed the pace of its U.S. growth by decreasing the number of fiscal year 2008 store openings from 1,600 to 1,175. The company also increased the number of international store locations to 975.
Starbucks has reduced its fiscal 2008 global net new-store opening target to approximately 2,150 stores, down from an adjusted 2,500 net new stores. This includes the closure of around 100 underperforming locations in the United States and the opening of about 75 additional net new stores in international markets.
$1 coffee rollout
Starbucks recently announced it will test $1 coffee in the company's Seattle locations.
"Similar to other leading global consumer brands, we believe there are opportunities to create segmentation, provide an entry point for new customers and generate trial in a way that will also maintain the value of the core brand proposition we offer," Schultz said. "It also recognizes the economic pressures our customers are under. We intend to reaffirm our position as the coffee authority and maintain our leadership position while broadening our appeal."
The company also has announced it will phase out its heat-and-serve egg sandwiches amid slow U.S. sales.
"In short, the scent of the warm sandwiches interferes with the coffee aroma in our stores, which is the key to the coffee experience that forges our connection with customers," Schultz said during a conference call with investors and analysts Wednesday.
