Retail coffee chain Starbucks (SBUX) has reported weak second-quarter financial results as its same-store sales continue to decline.
The Seattle-based company reported earnings per share (EPS) of $0.93 U.S., which matched consensus expectations.
Revenue of $9.11 billion U.S. fell short of the $9.24 billion U.S. that had been forecast on Wall Street. Sales were down 1% from a year earlier.
Starbucks said that its same-store sales fell 3% during the quarter, driven by a 5% decline in transactions at its coffee shops. Foot traffic at the company’s U.S. stores fell 6%.
Outside of North America, same-store sales dropped 7%. In China, Starbucks’ second biggest market, same-store sales fell 14% as both average ticket and transactions shrank.
The poor results were blamed on weak consumer demand and organized boycotts in some international markets.
Starbucks is in the process of trying to win back consumers with price discounts and new drinks. Executives have acknowledged that price increases have alienated some customers.
The company is also revamping its mobile app, allowing customers to order and pay without joining its rewards program.
Management said that the mobile app is now more accurate at predicting when an order will be ready, lowering customer complaints.
Starbucks opened 526 net new stores this spring and reiterated previous full-year guidance that forecasts revenue growth of a low single-digit percentage and flat earnings growth.
The company is under pressure from activist investor Elliott Management, which has accrued a stake in Starbucks and is pushing for changes.
On their earnings call, Starbucks management team acknowledged that Elliott Management is a shareholder and said that discussions so far have been constructive.
Starbucks’ stock has declined 25% over the last 12 months to trade at $75.94 U.S. per share.
