Starbucks posts disappointing sales figure, will sell Tazo
Starbucks reported disappointing sales growth at its coffee shops around the world Thursday, and announced that itwill sell its Tazo tea brand to Unilever for $384 million.
Shares of Starbucks Corp. tumbled nearly 7 percent in afterhours trading Thursday, falling $3.68 to $51.19.
Starbucks, which bought Tazo about 18 years ago for $8.1 million, said it will now focus on its Teavana line. Unilever, which owns Lipton, PG Tips and other tea brands, called the deal a “perfect strategic fit.” Both companies expect the deal to close in the next year. Although Starbucks has been shutting down standalone Teavana stores, it still sells the brand’s teas in Starbucks.
The coffee chain also said Thursday that fourth-quarter sales rose 2 percent at its established locations worldwide. Analysts had expected a rise of 3.3 percent, according to FactSet.
Overall, the company reported net income of $788.5million, or 54 cents per share, in the three months ending Oct. 1. Adjusted earnings came to 55 cents per share, matching what analysts expected.
Inthe same period a year ago, it reported net income of $801 million, or 54 cents per share.
The Seattle-based company said revenue slipped slightly to $5.7 billion, falling short of the $5.8 billion analysts expected.