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Starbucks raises outlook but sales miss estimates

NEW YORK (AP) -- Starbucks Corp. says its profit rose in its second fiscal quarter as the world's biggest coffee company saw sales increase in the U.S. and Asia.

The Seattle-based company, which has more than 18,000 locations around the world, raised its outlook for the year. But total sales came in shy of Wall Street expectations and its shares fell in afterhours trading.

Starbucks is facing more competition from restaurant chains that have been expanding their coffee menus to include more lattes and frozen drinks. But the company has nevertheless managed to keep growing by evolving its drinks and food offerings. For example, it recently started rolling out Evolution bottled juices in stores and new baked goods from a San Francisco bakery chain are on the way.

It's also making a big push behind its loyalty program as a way to boost sales.

During the quarter, global sales at cafes open at least 13 months rose 6 percent. That included a 7 percent increase in the U.S. and a 6 percent increase in the Americas overall. The number of average transactions and spending per visit both rose. In China and the Asia Pacific, where Starbucks is looking to grow, the figure rose 8 percent.

But it fell 2 percent in Europe, where Starbucks has struggled and has been working to turn around results.

"It just continues to be a tough environment for us — and for everyone," said Troy Alstead, the company's chief financial officer.

For the quarter, Starbucks earned $390.4 million, or 51 cents per share. That's up from $309.9 million, or 40 cents per share, a year ago. Not including one-time items, it earned 48 cents per share, in line with analyst estimates.

Revenue rose 11 percent to $3.56 billion. But that was shy of the $3.58 billion Wall Street expected, according to FactSet.

Shares of Starbucks were down 3 percent.

The company says it now expect full-year earnings of $2.12 to $2.18, up from the previous forecast of $2.06 to $2.15 per share.