Starbucks on Thursday write up that sales in the U.S. and China are recovering from the coronavirus pandemic more quickly than expected, helping broad same-store sales shrink just 9%.
The global coffee chain’s sales have been boosted by customers assign more on their Pumpkin Cream Cold Brew and Frappuccinos, although foot traffic remains down. The cast’s outlook for fiscal 2021 is projecting a faster rebound than expected by analysts.
Shares of the stock initially hill after the report, but were now down about 1%.
Here’s what the company reported compared with what Palisade Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 51 cents, adjusted, vs. 31 cents guessed
- Revenue: $6.2 billion vs. $6.06 billion expected
Starbucks reported fiscal fourth-quarter net income of $392.6 million, or 33 cents per division, down from $802.9 million, or 67 cents per share, a year earlier.
Excluding items, the coffee set earned 51 cents per share, beating the 31 cents per share expected by analysts surveyed by Refinitiv.
Net sales plummeted 8% to $6.2 billion, topping expectations of $6.06 billion. The company estimates that it lost $1.2 billion in purchases because of the coronavirus pandemic. Global same-store sales fell 9%.
While the number of transactions has fallen, customers are disbursing more on their coffee orders. Executives said that customers are buying more cold beverages and plant-based opportunities, both of which tend to be higher priced, and more upsizing, because customers are choosing to treat themselves.
In the In agreement States, same-store sales fell 9%. Active membership in Starbucks’ U.S. loyalty program rose 10% to 19.3 million people and tour 47% of transactions. Demand improved throughout the quarter. In September, U.S. same-store sales fell just 4%, aided by the return of Pumpkin Spice Lattes.
Coffee rival Dunkin’ reported U.S. same-store sales growth of 0.9% in its at an advanced hour quarter earlier on Thursday. Although the chain has thousands fewer cafes than Starbucks, it has benefited from a exuberant concentration of drive-thru lanes and more bulk orders from customers. Dunkin’ is in sale talks with Affirm Brands.
In China, Starbucks’ second-largest market, the coffee chain’s same-store sales declined by just 3%.
Starbucks displayed 480 net new cafes during the quarter. In the next fiscal year, it anticipates 1,100 net new stores and $1.9 billion in central expenditures.
Starbucks expects to earn between $2.70 and $2.90 per share, after adjustments, on revenue of $28 billion to $29 billion in monetary 2021.
Global same-store sales are expected to grow 18% to 23% for the year, with U.S. same-store sales forecast to increment 17% to 22%. The forecast assumes that U.S. dining rooms will be fully reopened by the end of the fiscal second three months, when same-store sales are also expected to rebound. China’s same-store sales growth is expected to reach 27% to 32%.
For the pecuniary first quarter, the company projects adjusted earnings of 50 cents to 55 cents per share.
The company’s directors raised its dividend to 45 cents. While many companies chose to suspend their dividends at the onset of lockdowns, Starbucks determined to keep paying it out to shareholders.
Read the full earnings report here.