Starbucks raises full-year earnings and revenue forecast, beats Q3 estimates
CEO Kevin Johnson says its US and China markets performed “extremely well”.
Starbucks has raised its full-year earnings and revenue forecast after more customers returned to cafes in the U.S. and China.
According to its Q3 results, the coffee giant got a revenue of US$6.82bn and global same-store sales growth of 6%. It also reported fiscal third-quarter net income of US$1.37bn, up from US$852.5m a year earlier.
“Our two targeted long-term growth markets, the U.S. and China, performed extremely well across a number of measures as a result of our focus on enhancing the customer experience, driving new beverage innovation and accelerating the expansion of our digital customer relationships,” Starbucks CEO Kevin Johnson said in a statement.
It now expects adjusted, or non-GAAP, earnings per share in the range of US$2.80 to US$2.82, up from a prior range of US$2.75 to US$2.79 per share. It is also forecasting revenue growth of 7%, on the high end of its prior range of 5% to 7%. Net sales, meanwhile, rose 8% to US$6.82 billion, topping expectations by analysts of US$6.67 billion.
Starbucks earlier announced an equity stake in restaurant tech company Brightloom, formerly known as Eatsa, allowing the chain’s global franchisees to have the chance to offer Starbucks’ mobile app to customers.
Growth in China
Amid concerns about slowing economic growth in China and increased competition from homegrown rival Luckin Coffee, Starbucks reported same-store sales growth of 6% in the country during the quarter, with 3% more transactions.
Johnson says some of Starbucks’ new Chinese stores will be an express format, meant to improve convenience for the customer. Luckin’s stores have a primarily smaller format to accommodate customers who want to pick up their coffee and go. Delivery, he says, will inform Starbucks’ decisions on where to put its new stores in China.
