Starbucks CEO Howard Schultz isn’t worried about the coffee giant’s disappointing sales report and mobile payment-related issues.
While the company posted its lowest same-store sales growth since 2009, reporting a 3 percent rise for the quarter, shy of the 3.9 percent analysts had been expecting, the coffee giant cited growing mobile pay and ordering as a major factor for the miss.
Schultz called the bottlenecking in chains “a good problem” on CNBC’s “Squawk on the Street”on Friday, noting that it is not an issue that is beyond the company’s ability to solve.
“I’m not really worried,” he said. “I know the market has overreacted to it, but we’re going to be fine.”
Shares were down more than 4 percent in pre-market trading on Friday.
Still, analysts don’t count Starbucks out.
“We continue to see Starbucks as one of the most compelling and forward thinking concepts with ample opportunity for growth despite its size,” Peter Saleh, an analyst with BTIG, wrote in a research note Friday. “While disappointed by the same-store sales results, particularly in the U.S. where adoption of Mobile Order and Pay is creating operational challenges, we believe Starbucks can reaccelerate comp growth in the coming quarters.”
Saleh noted that he still believes that the company is “favorably positioned against the industry” and he’s not the only one. Nomura-Instinet analyst Mark Kalinowski reiterated that Starbucks remains its top restaurant stock pick for 2017 despite the lower-than-expected same-store sales growth.
“The good news is the comparisons Starbucks will lap get less challenging over the next three to six months,” he wrote in a research note Friday.