Starbucks Corp has raised its full-year profit forecast and beat Wall Street estimates for quarterly same-store sales as its new Cloud Macchiato, Matcha tea and cold brews in the United States and speedy delivery network in China drew more customers.
The coffee chain's new drinks and a refreshed lunch menu focussed on improving customer traffic during the lean afternoon hours boosted same-store sales by 4% at established US cafés. Analysts were expecting sales growth of 3.58%.
Starbucks also added 13% more active members to its loyalty program in the United States as it expanded its delivery services to almost 1,600 stores in seven markets along with UberEats, and improved the speed of its ordering and payment processes on its app and at cafes.
China/Asia Pacific Region
The coffee chain has also been beefing up its delivery network in its second biggest market, China, to more than 2,100 stores in 35 cities by teaming up with Alibaba Group Holding Ltd .
This comes as it competes with local startup Luckin Coffee, whose speedy growth has led it to file for an IPO in the United States.
Same-store sales rose 2% in China/Asia Pacific region, helped by a 2% rise in average ticket. Analysts were expecting it to rise 1.5%, according to IBES data from Refinitiv.
Adjusted Profit Forecast
Starbucks also raised its adjusted profit forecast for the year to between $2.75 and $2.79 per share from its previous outlook of between $2.68 and $2.73 per share. Analysts on average were expecting $2.71 per share.
Operating Margins In The Americas
The company said operating margins in the Americas would now be "up slightly" instead of a drop expected earlier due to higher prices, restructuring efforts aimed at reducing costs and lower investments compared with last year.
Net Earnings And Total Net Revenue
Net earnings attributable to the company rose to $663.2 million, or 53 cents per share, in the second-quarter which ended on March 31, from $660.1 million, or 47 cents per share, a year earlier.
Excluding certain items, the company earned 60 cents, 4 cents more than the estimate.
Total net revenue rose 4.5% to $6.31 billion, but was slightly below the estimate of $6.32 billion.