Starbucks reports weaker-than-expected fiscal Q2 results as customer traffic slows

Earns Starbucks

Starbucks reported weaker-than-expected sales in its fiscal second quarter as customer traffic dried up in many key markets.

The Seattle coffee giant said its same-store sales – or sales at stores open at least a year – dropped 4%. Wall Street had expected a 1% increase, according to analysts polled by FactSet.

In the U.S., customers spent more per visit, but that wasn’t enough to overcome a 7% decline in transactions. In China, the company’s second-largest market, same-store sales plunged 11%.

Starbucks said revenue for the January-March period dropped 2% to $8.6 billion. That was far short of analysts’ forecast of $9.1 billion.

Starbucks’ net income dropped 15% to $772 million, or 68 cents per share. Wall Street had expected an 80-cent per share profit.