For the second quarter in a row, Starbucks‘ same-store sales failed to meet Wall Street expectations, but company execs say the worst could be over.
Despite the weaker-than-expected same-store sales growth, CEO Kevin Johnson, who took the helm on April 3, remained optimistic about the rest of the year.
“In our U.S. business in the last quarter, we saw our comp sales accelerate sequentially from
January to February, February to March we posted a 4 percent comp into March and we’re headed into the largest promotional season and that’s our Frappuccino happy hour,” Johnson said on CNBC’s “Squawk on the Street” Friday.
The company reported Thursday that global same-store sales rose 3 percent, however, forecasts called for same-store sales to be up 3.7 percent.
The coffee giant also reported second-quarter earnings that were in-line with forecasts, but revenue missed analysts’ estimates. Shares were down more 3 percent Friday.
In the first quarter, Starbucks also reported weaker-than-expected same-store sales growth, blaming bottlenecking at hand-off counters for deterring customer purchases. Johnson said that the company has “turned the corner” on this issue.
“We’re seeing all the signs of transactions growing, comps growing and you can just feel the momentum turning and we see it in the numbers,” Johnson said. “So, that gives us optimism that we’re making progress.”
In addition, Johnson said that the company’s limited-edition run of its “Instagramable” Unicorn Frappuccino drove significant traffic to chains as well as brand awareness and affinity. These sales will likely be seen in the company’s fiscal third-quarter earnings.
“We will bring at least one new entirely new drink into Happy Hour this year that is going to be as good as Unicorn or better,” Johnson said during an earnings call Thursday.