Starbucks Beats Earnings Forecasts, But Sales Fall

Starbucks Wednesday posted a quarterly profit excluding items that fell less than analysts expected, as cost savings helped offset an 8 percent drop in sales.

The coffee chain, which has been slashing costs to compensate for declining customer visits, has already announced plans to close almost 1,000 stores around the world to adjust to lower consumer demand.

Net income for its fiscal second quarter fell to $25 million, or 3 cents per share. A year earlier, the Seattle-based company reported a profit of $108.7 million, or 15 cents per share.

Excluding restructuring charges, Starbucks earned 16 cents a share, compared with the 15 cents a share analysts, on average, expected, according to Reuters Estimates.

Total revenue fell 7.6 percent to $2.3 billion. Sales at stores open at least 13 months dropped 8 percent due to a 5 percent decline in the number of customer transactions and a 3 percent fall in average sales.

"During the second quarter, we began to see signs of traction from the cost reduction and customer-facing initiatives we've undertaken over the past year," said Howard Schultz, chairman, president and CEO in a press release.

"Our focus on delivering value while staying true to the premium quality and values of the brand, is paying off," added Schultz. "Our recent introduction of Starbucks VIATM Ready Brew is a notable case in point and is showing significant promise in multiple channels."

Starbucks shares , which closed on Wednesday at $13.68, fell in extended trade. Shares have gained about 45 percent so far this year.

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—CNBC.com staff contributed to this report.

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