Starbucks earnings beat expectations as consumers spend more in its U.S. stores

Earnings

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The ornate art decor of the Starbucks coffee chain in Xujiahui district attracts customers’ attention in Shanghai, China, May 12, 2021.
Costfoto | Barcroft Media | Getty Images

Starbucks on Thursday reported quarterly earnings and revenue that topped analysts’ estimates, fueled by U.S. customers spending more on their orders.

Shares rose 2.3% in after-hours trading on the earnings report.

Here’s what the company reported for the quarter ended Oct. 2 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 81 cents adjusted vs. 72 cents expected
  • Revenue: $8.41 billion vs. $8.31 billion expected

Net sales rose 3.3% to $8.41 billion. Global same-store sales increased 7%, fueled by increased spending in its home market.

In the United States, Starbucks reported same-store sales growth of 11%, which was the result of people spending more on average and a slight uptick in traffic. Its loyalty program saw its active membership climb 16% to 28.7 million people in the quarter. 

Outside the U.S., Covid-19 restrictions in China continued to weigh on Starbucks’ international performance. The company’s international same-store sales fell 5%, which wasn’t as steep as the 7.1% expected decline, according to StreetAccount. Same-store sales in China, Starbucks’ second-largest market, fell 16% in the quarter. 

In September, Starbucks updated its long-term forecast at its investor day, where it also presented a broad strategy to reinvent the business. The company said it now expects earnings per share growth of 15% to 20% annually over the next three years. Additionally, it’s projecting that global and U.S. same-store sales will rise 7% to 9% annually.

Starbucks said in the press release on Thursday that executives will share more detail on the fiscal 2023 forecast on the quarterly conference call.

The coffee giant reported fiscal fourth-quarter net income attributable to Starbucks of $878.3 million, or 76 cents per share, down from $1.76 billion, or $1.49 per share, a year earlier.

Excluding restructuring and impairment costs, the sale of its Russian joint venture and other items, Starbucks earned 81 cents per share.

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