Prime Highlights
- Starbucks raised its earnings and sales outlook after a strong quarter of growth.
- CEO Brian Niccol said the company’s momentum had become clearly measurable.
Key Facts
- Starbucks is a global coffeehouse chain known for its “Back to Starbucks” turnaround strategy.
- North American same-store sales rose 8.1%, driven by higher traffic and spending.
Background
Starbucks has raised its full-year outlook after posting its fourth consecutive quarter of same-store sales growth, sending its shares up sharply in extended trading this week.
The coffee giant now expects adjusted earnings per share for the current financial year to range between $2.55 and $2.65, an upgrade from its earlier forecast of $2.25 to $2.45. It also lifted its same-store sales projections, expecting global sales to grow by nearly 6% and US sales by more than 6%.
For the quarter ending in late June, Starbucks reported adjusted earnings of 85 cents per share, comfortably beating market expectations of 66 cents. Revenue came in at $9.32 billion, ahead of the $9.16 billion forecast. Net income attributable to the company more than doubled to $1.05 billion, compared with the same period last year.
Same-store sales climbed 7.9%, outperforming estimates, with growth driven by both higher customer visits and increased spending per order. North American same-store sales rose 8.1%, supported by a 4.5% rise in traffic and a 3.5% increase in average ticket size.
Chief executive Brian Niccol said the quarter marked a point where the company’s turnaround momentum became clearly visible in the numbers. The company credited its “Back to Starbucks” strategy, which has focused on faster service, café renovations and menu changes, including plans to trial new sparkling drink options.
Starbucks opened 175 net new stores during the quarter and completed over 1,000 café upgrades, reaching its yearly target ahead of schedule.
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