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Starbucks earnings hit Wall Street's target in the latest quarter, but shares fell 3.5 percent in aftermarket trading on Thursday after the company posted its lowest same-store sales growth since 2009.
The coffee giant said same-store sales grew 3 percent during the fiscal first quarter, lower than analyst's expectations of 3.8 percent.
Same-store sales in the Americas rose 3 percent for the quarter, which was shy of the 3.9 percent estimate. President Kevin Johnson noted that same-store sales growth was hindered, in part, by growing mobile pay and ordering.
The soon-to-be CEO said during an earnings conference call that the bump in mobile ordering had caused many stores to experience congestion at the hand-off counter. Despite lines at the register being short, incoming customers would see the crowd and leave without making a purchase.
"We are now laser-focused on fixing this problem, but the nature of it, too much demand, is an operational challenge we have solved before and I can assure you we will solve again," CEO Howard Schultz said on a conference call.
The story was brighter at the company's China/Asia Pacific segment, where same-store sales rose 5 percent during the quarter, outpacing analyst expectations of 2.9 percent.
Starbucks' Europe, the Middle East and Africa segment saw same-store sales fall 1 percent during the quarter. Analysts expected the segment to grow 1.7 percent.
Despite the softer-than-expected sales, Starbucks posted adjusted earnings of 52 cents per share on $5.73 billion in revenue. For the first quarter, Starbucks was expected to earn 52 cents a share on $5.85 billion in revenue, according to a consensus estimate from Thomson Reuters.
"We are pleased with the record Q1 financial and operating results we announced today, particularly given that the results were delivered in the face of a challenging environment for restaurant retailers overall," Scott Maw, CFO of Starbucks said in statement Thursday.
The company said that it now expects revenue growth to be between 8 percent to 10 percent this year. Previously, the company's five-year strategic plan called for 10 percent revenue growth.
Starbucks reiterated its same-store sales forecast, projecting growth in the mid-single digits range globally. It also expects GAAP EPS in the range of $2.09 to $2.11 and non-GAAP EPS in the range of $2.12 to $2.14 for 2017.
Investors have been concerned with the company's decelerated same-store sales in the back-half of 2016 and Schultz's sudden departure as CEO of the company.
"Over the next six to 12 months, particularly as Starbucks begins to lap less difficult year-over-year same-store sales comparisons, we believe that investors' nervousness about these two factors will lessen," Mark Kalinowski, analyst with Nomura-Instinet, wrote in a research note earlier this month.
Ahead of the earnings release, he anticipates that same-store sales will jump 5 percent worldwide this year, with double-digit revenue expansion and EPS growth of 12 percent.