Starbucks says its second-quarter earnings will likely miss analyst expectations, as store traffic fell in the U.S. amid weak consumer spending.
“The current economic environment is the weakest in our company’s history, marked by lower home values, and rising costs for energy, food and other products that are directly impacting our customers,” said Howard Schultz, chairman, president and CEO.
The Seattle-based coffee chain is forecasting second-quarter earnings of 15 cents per share on a 12% revenue increase. Analysts polled by Thomson Financial were predicting a profit of 21 cents per share for the quarter ended March 30.
Starbucks says it now expects full-year earnings per share to be “somewhat lower” than the 87 cents per share recorded the previous year. Analysts expected a profit of 97 cents per share.
The company said sales in stores open at least a year fell in the mid-single-digit range in the U.S., due to a decline in traffic.
Restructuring costs also hurt earnings by 3 cents per share in the second quarter.
In after-hours trading Wednesday, shares in Starbucks had fallen more than 10 percent, dropping $1.85 to $16.