pcloudy.png
Saturday June 6th, 2020 10:03PM

Starbucks beats Q3 forecasts, raises full-year guidance

By The Associated Press
Related Articles
  Contact Editor

SEATTLE (AP) — Starbucks Corp. served up an extra frothy third quarter, zooming past Wall Street's forecasts thanks to new drinks and growing loyalty.

Based on the strong results, the Seattle-based coffee giant raised its full-year earnings guidance. It now expects adjusted earnings of $2.80 to $2.82 per share, up from $2.75 to $2.79. It also said it expects global same-store sales growth of 4%, which is at the higher end of its previous forecast.

Starbucks shares, which closed at a record $90.98 Thursday, rose even higher in after-market trading.

Starbucks reported revenue of $6.8 billion, up 8% over the April-June period a year ago. That was higher than the $6.7 billion analysts forecast, according to FactSet.

Net earnings rose 61% to $1.4 billion. Adjusted for income tax benefits and other one-time items, Starbucks earned 78 cents per share, beating Wall Street's forecast 72 cents.

Starbucks said sales at locations open at least 13 months — a critical measure known as same-store sales — jumped 6% globally, higher than the 4% growth analysts were predicting. Starbucks said half that growth came from increased transactions while half was due to visitors spending more.

In the U.S., same-store sales jumped 7%. Starbucks President and CEO Kevin Johnson said new cold drinks, like its cloud macchiato and nitro cold brew, helped draw traffic, particularly in the afternoon. A year-old effort to make stores more efficient is also paying off, Johnson said.

Delivery is not yet a meaningful revenue driver in the U.S., where it's available at 2,700 stores in 11 markets, Johnson said. But it's expected to be eventually. Earlier this week, Starbucks said it plans to expand delivery nationwide by early next year.

Johnson said Starbucks increased U.S. membership in its loyalty program by 14% to 17.2 million during the quarter and gave members more flexibility in how to spend their points. Around 42% of total U.S. spending came from loyalty members, he said.

"The acceleration we saw in active rewards members is paying off for us," Johnson said.

In China, where Starbucks is rapidly growing, same-store sales rose 6%. New beverages developed in Shanghai helped draw customers, Johnson said. Starbucks also launched mobile ordering and payment in four Chinese cities during the quarter.

Delivery sales represented 6% of total volume in China during the quarter. Starbucks now offers delivery from 2,900 stores in 80 Chinese cities, and expects that to exceed 3,000 stores by the end of its fiscal year.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Amazon's 2Q profits miss Wall Street expectations
Amazon's second quarter profits miss Wall Street expectations
5:41PM ( 2 minutes ago )
House passes bipartisan budget bill with Trump support
The Democratic-controlled House has easily passed bipartisan debt and budget legislation
5:37PM ( 6 minutes ago )
'Orange Is the New Black' offers fans a way to give back
The Netflix series "Orange Is the New Black" is offering fans a way to give back by helping advocacy groups pressing for criminal justice reform, support women re-entering society from prison, protect immigrants' rights and end mass incarceration.
5:27PM ( 16 minutes ago )
Associated Press (AP)
Apple buys Intel's smartphone modem division for $1 billion
Apple snaps up Intel's smartphone modem division for $1 billion as iPhone maker gears up for next generation of wireless technology
4:57PM ( 47 minutes ago )
Google crushes second quarter earnings expectations
Google parent Alphabet beat analyst expectations for its second quarter financials Thursday, pleasing investors and sending its stock price up
4:56PM ( 47 minutes ago )
Whitney Museum leader linked to tear gas quits after protest
The vice chairman of New York's Whitney Museum of American Art has resigned amid protests over his ownership of a company that makes law-enforcement supplies including tear gas
4:52PM ( 52 minutes ago )
AP Business
American expects grounded jet to cut profit by $400 million
American Airlines says grounding of its Boeing 737 Max planes will cut 2019 pretax income by $400 million, including $175 million in the just-concluded second quarter
11:10AM ( 6 hours ago )
US factory orders for large manufactured goods up 2% in June
Orders to US factories for large manufactured goods rose 2% in June after sharp declines in May and April
9:09AM ( 8 hours ago )
Profit flat as Southwest takes $175 million hit from Max jet
Southwest Airlines says the grounded Boeing 737 Max jet cut its second-quarter profit by $175 million, and it has removed the plane from its schedule until January
8:27AM ( 9 hours ago )
AP Business - Corporate News
Amazon's 2Q profits miss Wall Street expectations
Amazon's second quarter profits miss Wall Street expectations
5:41PM ( 2 minutes ago )
House passes bipartisan budget bill with Trump support
The Democratic-controlled House has easily passed bipartisan debt and budget legislation
5:37PM ( 6 minutes ago )
'Orange Is the New Black' offers fans a way to give back
The Netflix series "Orange Is the New Black" is offering fans a way to give back by helping advocacy groups pressing for criminal justice reform, support women re-entering society from prison, protect immigrants' rights and end mass incarceration.
5:27PM ( 16 minutes ago )
Stocks slide over disappointing earnings reports
U.S. stocks retreated from record highs as large companies delivered weak earnings reports and disappointing forecasts
5:24PM ( 20 minutes ago )
Move on? No thanks. Both sides aim to keep talking Mueller
Move on? No thanks. Both sides aim to keep talking about Mueller report in bid to motivate core supporters
5:22PM ( 21 minutes ago )