Starbucks reported quarterly earnings on Thursday that exceeded analysts' expectations, but sales declined slightly as clients invested more in retail outlets.
- Earnings per share: 60 cents, adjusted, vs. 56 cents expected
- Sales: $ 6.31
- Same store sales: 3% vs. 2.9% expected
The coffee chain posted a second quarter result fiscal net income of $ 663.2 million, or 53 cents per share, compared to $ 660.1 million or 47 cents per share a year ago.
Excluding the sale of the Tazo brand, costs associated with the licensing agreement with Nestle and other acquired Starbucks products polled 60 cents a share, the expected 56 cents a share of analysts surveyed by Refinitiv.
Net sales increased 5% to $ 6.31 billion.
The company achieved sales growth of 3% in the same store, surpassing Wall Street estimates of 2.9%. Starbucks attributed the growth to an average ticket increase of 3%. In the US, sales in stores that were open at least one year increased 4%. In China, the company even saw sales growth of 3% in the same stores, where the company faces increasing competition from Luckin Coffee and a slowing economy.
The company has raised its earnings forecast for the full year. Adjusted or non-GAAP earnings per share are now expected to be in the range of $ 2.75 to $ 2.79, compared to a previous range of $ 2.68 to $ 2.73. Analysts forecasted a profit of $ 2.71 per share for 2019.
Starbucks' loyalty program grew to 16.8 million active members in the United States, an increase of 13% over the previous year. The Seattle-based company has recently revamped the program, offering its members a wider range of redemption options. The changes also mean that customers have to spend more to get a free drink. In contrast to recent changes to its loyalty program in 2016, Starbucks has largely avoided social media repercussions.