Coffee chain Starbucks have reported quarterly earnings that have exceeded what was forecasted. This was the result of an uptick in customer patronage in the United States, in addition to growth of sales in China. Compared to expectations, here is a breakdown of the results:
• Earnings per share: Expectation was $0.56, and the actual figure was $0.60
• Revenue generated: Expectation was $6.32 billion, and the actual figure was $6.31 billion
• Same-store sales: Expectation was 2.9 percent, and the actual figure was 3 percent
Starbucks reported second-quarter fiscal net income of $663.2 million ($0.53 per share), which is an increase over last year’s $660.1 million ($0.47 per share).
Based on these results, the coffee chain has adjusted its full-year earnings forecast. The expectation for non-GAAP earnings per share has been set to a range of $2.75 – $2.79. This is an increase over the prior range of $2.68 – $2.73. Analysts, however, have forecasted $2.71 for 2019.
Starbucks CFO, Pat Grismer, stated that while the sales growth was largely driven by ticket, beverage mix & match accounted for half of the ticket growth. He stated that this is an indication of the fact that the higher margin premium offerings were well received by customers.
The coffee chain’s recently revamped loyalty program has also seen growth as it now has 16.8 million active members, which is an increase of 13% over last year.
Additionally, the company has opened 319 new stores, which means the total now sits at 30,184 around the world. Though the company is Seattle based, 94% of these openings are were outside of the United States. The coffee chain indicated that it has no plans of slowing down, as it aims to open 2,100 net new stores worldwide. The intention is to open 600 of these stores in China alone, as Starbucks’ rival Luckin intends to open 2,500 this year to take over from Starbucks as the largest coffee chain in China.