Starbucks announced a dip in the overall growth of sales at its retail coffee shops all across the globe on November 2, 2017, and reported that it will now sell its brand – Tazo tea – to Unilever for about US$384 million.
The Starbucks Corp. shares dropped down by nearly 7 percent in the after-hours trading on November 2, 2017.
Tazo was purchased by Starbucks for about US$8.1 million 18 years ago. The company said it will now concentrate on its Teavana line. Unilever, which owns PG Tips, Lipton, and other prominent tea brands, said this deal is a perfect strategic fit for them. Both the companies project the deal to finish up in the next year. Although Starbucks has been closing down the exclusive Teavana stores, it continues to sell the brand’s tea in its retail Starbucks shops.
The Starbucks CEO, Kevin Johnson said that the company now solely and exclusively wants to focus on the Teavana brand.
The coffee chain giants also said on Thursday, November 2, 2017, that its sales rose by 2 percent in the fourth quarter sales at its well set locations across the globe. Analysts had predicted a growth of 3.3 percent, according to FactSet.
All in all, the company has now reported a gross income of US$788.5 million, or 54 cents per share, in the last three months ending October 1. The overall adjusted income was calculated to be 55 cents per share, matching up to the prediction of the analysts.
In the same period, a year back, the company announced net earnings of US$801 million, 54 cents per share.