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Starbucks Slumps on Analyst’s Report of Sales Slowdown

Starbucks Corp. (SBUX), the world’s largest coffee-shop operator, fell the most in more than a year after an analyst at ITG Investment Research said sales growth in the Americas may be slowing.

Starbucks fell 2.9 percent to $77.38 at the close in New York for the biggest decline since Oct. 19, 2012. The Seattle-based company has gained 44 percent this year, while the Standard & Poor’s 500 Index increased 26 percent.

“Coming off two very strong quarters, our proprietary data indicates the chain’s momentum may have slowed this quarter,” Steve West, a St. Louis-based analyst at ITG, said in a research note.

Same-store sales for Starbucks’ Americas region may increase as much as 6 percent in the company’s fiscal first quarter, which runs through December, he said. Sales at Starbucks locations open at least 13 months rose 8 percent in the three months ended Sept. 29 in the Americas, which includes the U.S., Canada and Latin America.

Starbucks Chief Executive Officer Howard Schultz has been attracting American consumers with new foods, juices and teas under the company’s Evolution Fresh and Teavana brands. Revenue has increased at least 10 percent for the past eight quarters.

‘Consumer Spending’

“Slowing consumer spending and sentiment eventually catches up with everyone,” West said in an e-mailed response to questions. Sales expectations are “very high” for Starbucks, he said.

“As we stated on our most recent earnings call, fiscal year 2013 was our strongest year in our 42-year history and we are optimistic about fiscal year 2014,” Jim Olson, a Starbucks spokesman, said today in a telephone interview. “We’re not going to speculate on rumors or outside comments.”

Starbucks has about 19,700 locations worldwide, including more than 13,400 in its Americas region.

Growth in same-store sales also slowed at Whole Foods Market Inc. (WFM) in its fiscal first quarter, West also said in a phone interview.

“All these are high-end chains that have typically been bullet proof to slowdowns until just recently,” he said.

Whole Foods, based in Austin, Texas, last month lowered its fiscal 2014 profit forecast as same-store sales growth slowed in the three months ended Sept. 29.

Comparable Sales

West estimates Chipotle Mexican Grill Inc.’s same-store sales in the fourth quarter will increase between 6 percent and 7 percent and that revenue will be $820 million. Analysts project revenue of $826.9 million, the average of 20 estimates compiled by Bloomberg.

Denver-based Chipotle, which has been spending more on advertising, reported in October that third-quarter comparable-store sales rose 6.2 percent, topping analysts (CMG)’ estimates.

Chris Arnold, a spokesman for Chipotle, declined to comment on the company’s fourth-quarter performance. Chipotle in October forecast that comparable sales would increase at a “mid-single digit” rate in 2013.

Libba Letton, a spokeswoman for Whole Foods, didn’t immediately respond to a request for comment.

Whole Foods was little changed at $55.71 and Chipotle fell 1.1 percent to $521.53 at the close.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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