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Jul 21, 7:08 PM EDT

Starbucks cuts sales forecast after growth slows

AP Photo
AP Photo/Ted S. Warren

NEW YORK (AP) -- Starbucks trimmed its sales forecast Thursday after revenue came in lighter than expected in the most recent quarter.

The Seattle-based company said global sales rose 4 percent at established locations, including in its flagship U.S. market, for its fiscal third quarter. It now expects the figure to increase in the mid-single digit percentages for the year. It previously forecast growth to be "somewhat above" that range.

In a conference call with analysts, Chairman and CEO Howard Shultz noted that compared with other times when the marketplace has been challenging, the current period, with its presidential-election uncertainty and "civil unrest with regard to race," is different. He said the sense of community Starbucks has created should help the company.

The results come after the coffee chain revamped its rewards program in April, which some had speculated might drive away some customers.

Chief Operating Officer Kevin Johnson said the new rewards program was successful, with growth in active members. That's even though customer traffic was flat in the period from a year ago in the U.S.

But Johnson said the overhaul - which now rewards people based on spending rather than transactions - has led to fewer customers splitting their purchases to collect more points. He also said the rollout meant training workers and delaying the launch of a Frappuccino promotion, which didn't have as much of an impact.

For the quarter, Starbucks said its profit rose to $754.1 million, or 51 cents per share. That was more than the 49 cents per share analysts expected.

Total revenue was $5.24 billion, shy of the $5.34 billion analysts expected, according to FactSet.

Shares were down about 4 percent at $55.25 in after-hours trading.

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