Starbucks Tuesday Report Quarterly earnings and revenue topped analysts’ expectations, driven by better-than-expected international sales.
In China, the company’s second-largest market, Starbucks’ same-store sales rose for the first time since the third quarter of fiscal 2021, as customers returned to its cafes after Beijing’s zero-Covid policy was lifted.
However, shares fell 5.6 percent in after-hours trading after executives reiterated their outlook for the full fiscal year.
Here’s how Starbucks’ report compared with Wall Street expectations, according to a Refinitiv survey of analysts:
- EPS: Adjusted 74 cents vs. 65 cents expected
- income: $8.72 billion vs. $8.4 billion expected
The coffee giant reported net income of $908.3 million, or 79 cents a share, in the fiscal second quarter, up from $674.5 million, or 58 cents a share, a year earlier.
Excluding items, Starbucks earned 74 cents a share.
Net sales rose 14.2 percent to $8.72 billion. The company’s same-store sales rose 11% in the quarter, beating StreetAccount’s estimate of 7.1%. Both the U.S. and international markets outperformed expectations.
“It’s remarkable on any level, but especially given the seasonal pressures we typically experience in (the second quarter),” treasurer Rachel Ruggeri said on the company’s conference call.
U.S. same-store sales rose 12% and traffic rose 6%.Some catering companies, such as Outback Steakhouse owner blooming brandfoot traffic is reportedly dwindling as customers eat out less. Starbucks joins other outliers such as McDonald’s and Chipotle Mexican Grillwhich also saw a surge in traffic.
The company said its active U.S. loyalty program members rose 15% to 30.8 million in the quarter ended April 2 from a year earlier.
Outside the U.S., the coffee chain’s same-store sales rose 7%.
In China, the gauge rose 3%. Belinda Wong, chairman of Starbucks China, said the business’ same-store sales rose 30% in March and the momentum continued into the fiscal third quarter.
“We’re very encouraged by the signs we’re seeing, but we’re exploring a lot,” Ruggeri said.
Last quarter, then-CEO Howard Schultz said the company expected its business in China to recover in the second half of fiscal 2023.
Starbucks reaffirms its fiscal year outlook, projected revenue growth 10% to 12%, with adjusted EPS growth in the low end of the 15% to 20% range.
Starbucks opened 464 new stores during the quarter.