Starbucks (SBUX) Serves Up Lukewarm First Quarter

NEW YORK (TheStreet) -- Starbucks (SBUX) was under pressure to overdeliver in its first quarterly report of 2014, as investors had high hopes it could buck the low-traffic trends plaguing retail and restaurant chains. While revenue missed expectations and U.S. same-store sales weren't as strong as desired, there's still a lot to savor in the coffee chain's December-ended quarter.

For the first-quarter ended Dec. 29, the coffee chain reported $4.24 billion in revenue, 12% higher than the year-ago quarter. However, those numbers missed Thomson Reuters estimates by $54 million. Net income experienced a 25% year-over-year increase, as Starbucks earned 71 cents a share, beating consensus estimates by 2 cents.

"Starbucks strong Q1 results once again demonstrate the fundamental strength of the Starbucks business, particularly noteworthy given the continued economic challenges worldwide," said CFO Troy Alstead in a statement.

Global same-store sales growth of 5% fell within the company's guidance range for a mid-single-digit increase, but failed to reach analysts' expectations of a 5.9% increase. Comparable-store sales in the Americas and U.S. jumped 5%, though fell short of the 6.4% growth anticipated by estimates provider Consensus Metrix.

While sales on home turf failed to impress, the coffee giant exceeded expectations overseas. Comparable sales in Europe, the Middle East and Africa increased 5%, its highest growth in 13 quarters, and significantly higher than analyst consensus of 2%. Meanwhile, China and the Asia-Pacific saw comp growth of 8% compared to an expected 7.7% increase.

"Holiday 2013 was the first in which many traditional brick-and-mortar retailers experienced in-store foot traffic give way to online shopping in a major way," said CEO Howard Schultz in a statement. "As our solid traffic growth and record Q1 results demonstrate, Starbucks unique combination of physical and digital assets positions us as one of the very few consumer brands with a national and global footprint to benefit from the seismic shift underway."

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