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Starbucks (Nasdaq: SBUX) earnings and revenue both beat estimates and were 18% better than a year ago. But the stock is down 5% in after-hours trading anyway.
The problem, it seems, was same-store sales. Worldwide, same-store sales were expected to grow 9% in the company’s fiscal second quarter, which ended April 1. Instead they only grew 7%.
Starbucks particularly struggled in Europe, the Middle East and Africa. Same-store sales fell 1% in those countries. However, sales in China swelled by more than 20%.
Earnings were $309.9 million, or 40 cents a share – a penny more than most analysts were expecting. Starbucks also bumped its fiscal year earnings targets up to between $1.81 and $1.84 per share from its previous target of $1.78 to $1.82.
Most of those numbers are solid, and at least slightly better than Wall Street estimates. So it seems odd that the stock has fallen so fast after hours.
Perhaps the stock was simply due for a pullback. After all, Starbucks shares were up an amazing 32% for the year through the market close today. The stock was trading at 36 times earnings.
Maybe anything shy of beating estimates by a wide margin wasn’t enough to avoid a post-earnings slide. It seems as if investors were nervous that Starbucks had gotten a bit too big for its britches, and were looking for the slightest excuse for a sell-off.