Starbucks sales miss as virus spike keeps customers at home

Starbucks Corp on Tuesday reported a larger-than-expected fall in quarterly sales as the renewed surge in coronavirus cases in the United States kept customers at home.

The world’s largest coffee chain’s global same-store sales fell 5 percent in its first quarter, which ended Dec. 27, more than analysts’ estimates of a 3.4 percent decline, according to Refinitiv IBES data.

Shares fell slightly in extended trading.

The second wave of COVID-19 infections and accompanying restrictions dented traffic at the coffee chain’s stores, hampering its efforts to boost demand through product launches and new drive-thrus.

Comparable sales declined 6 percent for the Americas region, compared with a 5.2 percent fall expected by analysts.

But in China, Starbucks’ biggest growth market, comparable sales rose 5 percent as the company benefited from the popularity of its rewards program and the return of pre-coronavirus consumer habits.

Customers also spent more money per order, helping to offset fewer transactions.

Starbucks also said Chief Operating Officer Roz Brewer would be leaving the company next month to take a chief executive officer role at another company.

Walgreens Boots Alliance Inc later announced that Brewer would take the helm at the company effective March 15.

For the second quarter, Starbucks said it expects U.S. comparable sales to rise between 5 percent and 10 percent, while in China they were forecast to grow nearly two-fold a year after the pandemic hit the region.

The company did not change its guidance of an expected rebound overall this year, with global comparable sales expected to rise 18 percent to 23 percent in 2021.

Net revenue fell 5 percent to $6.7 billion, missing expectations of $6.93 billion.

The Seattle-based company has been closing some stores, adding drive-thrus to others, remaking some with smaller cafes and building a few with no seating at all as it focuses on expanding to-go options.

Overall, the company opened 278 net new stores in the quarter, for 4 percent year over year growth. It now has 32,938 stores around the world, 51 percent of which are company-operated.

Starbucks also saw coffee lovers return to its Rewards loyalty program, with its count of 90-day active U.S. members increase 15 percent year over year to 21.8 million.

-reuters-

Privacy fine set-aside dents Facebook's profit

SAN FRANCISCO -- Facebook said Wednesday its profit took a hit from setting aside billions of dollars for an anticipated fine from US regulators, in a quarterly report that sent shares higher.

The leading social network logged a profit of $2.4 billion -- down 51 percent from a year earlier -- on revenue that climbed 26 percent to $15.1 billion in the first 3 months of this year.

The number of monthly active users of Facebook at the end of March was 2.38 billion, up eight percent from a year ago.

Facebook estimated that it will be hit with a fine of $3 billion to $5 billion by the US Federal Trade Commission for "user data practices," and factored that into its earnings report.

"The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome," the California-based company said in the release.

Facebook shares rallied more than 7 percent in after-hours trade following the results.

Profits would have topped Wall Street forecasts if not for the money put aside for the expected FTC fine.

"We had a good quarter and our business and community continue to grow," Facebook chief executive and co-founder Mark Zuckerberg said in a statement.

"We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet."

The FTC announced last year it was reopening its investigation into Facebook for potential violations of a 2011 settlement over privacy practices.

'SOLID' RESULTS 

Over the past year, the social network has come under fire following revelations on the hijacking of personal data of tens of millions of users by Cambridge Analytica, a consultancy working for Donald Trump's 2016 campaign.

A series of other revelations showed Facebook may have also shared more private data with business partners and advertisers than it had reported, and may have exposed some personal information that should have been secured.

At the same time, Facebook has been hiring thousands of additional employees to deal with issues such as hate speech, incitement to violence and manipulation aimed at voters.

Facebook said its employee count was 37,773 as of March 31, an increase of 36 percent over the past year.

Despite the controversies, some 2.7 billion people use at least one of the "family" of the company's applications including the core Facebook network, Instagram, and messaging applications WhatsApp and Messenger.

The latest results showed "solid performance in revenue and user growth," said analyst Debra Aho Williamson of the research firm eMarketer.

Williamson said advertisers are staying with Facebook despite controversies that have plagued the social networking giant.

"While marketers may say privately that they do worry about Facebook's problems with fake news, election meddling, privacy and more, they worry more about their own financial health, and Facebook is still a major partner in that regard," Williamson said.

She advised advertisers to view the FTC fine revelation as a significant development that could bring about changes effecting the way they can use the social network for marketing.

source: news.abs-cbn.com

Facebook hammered as user growth cools

SAN FRANCISCO, United States - Facebook shares took a hit Wednesday after the world's biggest social network reported weaker-than-expected user growth in the first full quarter since being rocked by a series of scandals on data privacy.

The company said profit was up 31 percent in the second quarter at $5.1 billion as revenues rose 42 percent to $13.2 billion.

But shares slumped 7 percent in after-hours exchanges after hitting record levels in official trading, with the quarterly report largely weaker than had been expected.

"Our community and business continue to grow quickly. We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect," chief executive Mark Zuckerberg said.

Zuckerberg has said he did not expect a meaningful impact from the uproar over data hijacked by political consulting firm Cambridge Analytica, but the last quarter's figures suggested some cooling.

The key metric of monthly active users rose 11 percent to 2.23 billion, below most estimates of 2.25 billion, while daily active users grew a weaker-than-expected 11 percent to 1.47 billion.

Almost all of Facebook's revenue -- $13 billion of the total $13.2 billion -- came from online advertising, a sector dominated by the California social network along with Silicon Valley rival Google.

Although Facebook shares were in a slump after the Cambridge Analytica scandal broke earlier this year, the stock had risen sharply and hit record levels this month.

According to the research firm eMarketer, Facebook is expected to hold an 18 percent share of the $273.29 billion worldwide digital ad market, behind Google's 31 percent.

According to the research firm, Facebook-owned Instagram is making up for some of the slowdown in growth at social network and will generate $8.06 billion in worldwide ad revenue this year.

source: news.abs-cbn.com