Sat, Nov 03, 2018 - Page 10 News List

Starbucks beats fiscal Q4 forecasts on higher sales

AP, SEATTLE

A Venti Mocha Frappuccino is pictured at a Starbucks shop in New York City on June 20.

Photo: AP

A jump in US sales helped Starbucks Corp end its fiscal year on a high note.

Starbucks said its same-store sales — a critical measure for retailers — rose 4 percent in the US in its fiscal fourth quarter.

That helped its global same-store sales rise 3 percent, ahead of analysts’ expectations, according to FactSet.

Same-store sales climbed 1 percent in China, another critical market for the coffee chain and an improvement from the prior quarter.

“These results provide encouraging evidence that our plan is working,” Starbucks CEO Kevin Johnson said in a conference call with investors.

Starbucks shares rose 8 percent in after-hours trading on Thursday.

The Seattle-based company said that its US customers spent more during the quarter, partly because of a price increase for brewed coffee the company announced in June.

Starbucks chief operating officer Rosalind Brewer said that beverage sales were responsible for most of the increase in US same-stores sales.

Starbucks saw stronger sales of cold drinks, such as its line of fruity Refreshers. A bigger social media effort for Starbucks’ popular Pumpkin Spice Latte also paid off, Brewer said.

A new effort to decrease the amount of time employees spend on administrative tasks so they can spend more time handling customers is increasing customer satisfaction and return visits, she added.

Starbucks saw a 15 percent increase in the number of US loyalty program members during the July-September period to 15.3 million.

The company reported a net income of US$755.8 million for the quarter, or US$0.56 per share.

Earnings, adjusted for non-recurring costs, were US$0.62 per share.

That beat the average estimate of US$0.59 per share by 13 analysts surveyed by Zacks Investment Research.

The coffee chain posted revenue of US6.3 billion in the period, which also beat forecasts.

For the full year, revenue was up 10 percent to a record US24.7 billion. Adjusted earnings rose 17 percent to US$2.42 per share.

Starbucks said it expects its global same-store sales to be at the low end of a 3 to 5 percent increase in its 2019 fiscal year.

It expects global revenue to rise 5 to 7 percent, with adjusted earnings of US$2.61 to US$2.66 per share.

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