Starbucks to launch credit card and sell Tazo tea brand to Unilever
Alongside two key announcements, the coffee chain also reported disappointing fourth quarter sales growth.
Starbucks announced deals to sell its Tazo tea brand to Unilever and launch a credit card with Chase bank late on Thursday (2 November).
However, the coffee chain also reported disappointing fourth quarter sales growth at stores around the world, and its shares fell more than 3% in after-hours US trading.
The Seattle-based company said Unilever will pay $384m (£294.2m) for Tazo in a deal that is expected to be completed in the next year. Unilever, which owns the Lipton and PG Tips tea brands, called the acquisition a "perfect strategic fit."
Starbucks, which bought Tazo about 18 years ago for $8.1m, said it wants to focus on its Teavana tea brand. Although Starbucks has been shutting down stand-alone Teavana stores, it still sells its teas in stores.
The company expects to launch a Starbucks-branded credit card with Chase this winter. A prepaid card will come later.
The company said both cards will allow customers to earn Starbucks rewards when they spend. Co-branded cards, which feature the brand of a bank and another company, have been popular for decades since they help strengthen customer loyalty.
Ride-hailing company Uber, for example, announced a card with British bank Barclays last week. Starbucks' financial results, meanwhile, showed slowing growth.
The chain said fourth-quarter sales rose 2% at its established locations worldwide, below the 3.3% Wall Street analysts expected, according to FactSet. During the same period a year ago, those sales grew 4%.
Overall, the company reported net income of $788.5m, or 54 cents per share, in the three months ending 1 October. Adjusted earnings came to 55 cents per share, matching what analysts expected. In the same period a year ago, Starbucks reported net income of $801m, or 54 cents per share.
Revenue slipped slightly to $5.7bn, falling short of the $5.8bn analysts expected.
