When it comes to Starbucks, it's thumbs-up for coffee, thumbs-down for tea
Starbucks announced Thursday it is closing all 379 of its Teavana stores mostly situated in malls over the coming year because they haven't been successful. The company's best efforts were unable to help turn the locations around.
The stores will be closed by next spring and the 3,300 employees will be able to apply for jobs in Starbucks stores, where it is expected to create 68,000 new jobs alone in the next five years.
"Following a strategic review of the Teavana store business, the company concluded that despite efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue," Starbucks said in disclosing its earnings.
Overall, Starbucks said it is "cautious" about the current quarter. With the Teavana retrenchment ahead, Starbucks reported that it earned $691.6 million, or 47 cents a share for the third-fiscal quarter ended July 2, down 8.3% from $754.1 million, or 51 cents, in the same quarter a year ago.
Revenue was $5.7 billion in revenue, up 8.1% from last year's $5.2 billion. in its fiscal third quarter ended July 2. It prospered by building on marketing coups, from its popular loyalty program to the weird, limited-time Unicorn Frappuccino drink that reaped a bounty of media attention.
Global sales in stores open at least a year -- a measure of growth without taking the addition of new stores into account -- increased 4%. In the U.S., comp store sales increased 5% when using the same growth yardstick. They were helped by a 5% increase in the average transaction.
Starbucks Rewards membership grew 8% compared to last year a total of 13.3 million active members.
The company also said it opened 575 net new stores around the world for a total of 26,736 locations in 75 countries.
Earlier on Thursday, Starbucks announced that it had Starbucks effectively acquired full control of its China stores.
The Unicorn Frappuccino, offered for a limited time in April, became an Internet sensation.