Investors registered their disappointment in a U.S. traffic decline at Starbucks Corp. but also rewarded coffee maker Green Mountain Coffee Roasters for a big first-quarter profit rise.
After the market closed Wednesday, Starbucks said its sales at stores open at least 13 months, a key measure of a retailer's performance, fell 1 percent in the U.S. Traffic declined domestically _ for the the second quarter in a row _ by 3 percent.
Besides reporting the dip in traffic, Starbucks said it would stop selling hot breakfast sandwiches, which add about $35,000 to a typical store's annual revenue. Chairman and Chief Executive Howard Schultz acknowledged the company may take a hit in the near-term due to the loss of that revenue.
Thomas Weisel Partners analyst Matthew DiFrisco said in a note to investors that getting rid of the sandwiches is "a first step to regaining the 'Starbucks experience' that has been diminished."
The company also said it would open about 425 fewer domestic stores, which DiFrisco also viewed as a step in the right direction.
Investors, though, were disappointed, sending shares down $1, or 5.2 percent, to $18.22 in morning trading.
The news was much better at Green Mountain Coffee, where the growing popularity of subsidiary Keurig Inc.'s single-cup coffee brewers boosted first-quarter profit by 20 percent and revenue by 52 percent.
The company also boosted its 2008 profit outlook on the likelihood that strong Keurig sales would continue.
Shares rose $1.29, or 3.8 percent, to $35.69.
Elsewhere in the sector, shares of Caribou Coffee Co. Inc. shares jumped 24 cents, or 8.7 percent, to $3. Shares of Peet's Coffee & Tea Inc. hit a new 52-week low of $21.60 before rebounding slightly to fall 30 cents to $21.80. The shares have traded between $22.05 and $30.37 in the past 52 weeks.