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The Starbucks sign is seen outside one of its stores in New York on July 3 2008. File Picture: REUTERS/Chip East
Bengaluru — Starbucks beat Wall Street targets for fourth-quarter results on Thursday, as strong demand for its pricey coffees and cold drinks in North America offset a feeble recovery in China, sending its shares up 8% premarket.
The global coffee chain has benefited from a younger, more affluent consumer base despite the wider US restaurant industry grappling with a slowdown as sticky inflation prompts people to rethink dining out.
Traffic at the coffee chain’s US locations jumped throughout the quarter, data from Placer.ai showed, boosted by the fanfare around the late-August return of its iconic autumn season staple — the Pumpkin Spice Latte.
There was a 20% surge in traffic on the day of the launch, and it continued to climb in the weeks after, the data showed.
Starbucks has also leant on its breakfast sandwiches, wraps and bakery items to drive up customer spending at stores. Average ticket in the US — or the average spending per customer on a visit — jumped 6% in the quarter.
That, coupled with a 2% rise in customer transactions, propelled US same-store sales 8% higher.
Still, China sales came in just 5% higher — much smaller than the 46% surge seen in the previous quarter — suggesting that trends in the company’s second-largest market were not recovering as robustly as expected.
Ticket fell 3% in China, indicating consumers were spending less at the coffee chain, as it also faces tough competition from local rivals such as Luckin Coffee and Manner Coffee.
Global comparable sales at Starbucks climbed 8% in the financial fourth quarter, compared with analysts’ expectations for a 6.56% rise, according to LSEG IBES data.
Excluding items, Starbucks posted a per-share profit of $1.06 for the quarter ended October 1, surpassing estimates of 97c.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Starbucks beats market’s Q4 targets
Bengaluru — Starbucks beat Wall Street targets for fourth-quarter results on Thursday, as strong demand for its pricey coffees and cold drinks in North America offset a feeble recovery in China, sending its shares up 8% premarket.
The global coffee chain has benefited from a younger, more affluent consumer base despite the wider US restaurant industry grappling with a slowdown as sticky inflation prompts people to rethink dining out.
Traffic at the coffee chain’s US locations jumped throughout the quarter, data from Placer.ai showed, boosted by the fanfare around the late-August return of its iconic autumn season staple — the Pumpkin Spice Latte.
There was a 20% surge in traffic on the day of the launch, and it continued to climb in the weeks after, the data showed.
Starbucks has also leant on its breakfast sandwiches, wraps and bakery items to drive up customer spending at stores. Average ticket in the US — or the average spending per customer on a visit — jumped 6% in the quarter.
That, coupled with a 2% rise in customer transactions, propelled US same-store sales 8% higher.
Still, China sales came in just 5% higher — much smaller than the 46% surge seen in the previous quarter — suggesting that trends in the company’s second-largest market were not recovering as robustly as expected.
Ticket fell 3% in China, indicating consumers were spending less at the coffee chain, as it also faces tough competition from local rivals such as Luckin Coffee and Manner Coffee.
Global comparable sales at Starbucks climbed 8% in the financial fourth quarter, compared with analysts’ expectations for a 6.56% rise, according to LSEG IBES data.
Excluding items, Starbucks posted a per-share profit of $1.06 for the quarter ended October 1, surpassing estimates of 97c.
Reuters
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