New coffees, delivery push fuel Starbucks quarterly sales, profit view

(Reuters) - Starbucks Corp raised its full-year profit forecast and beat Wall Street estimates for quarterly same-store sales on Thursday, as its new Cloud Macchiato, Matcha tea and cold brews in the United States and speedy delivery network in China drew more customers. Shares of the world's largest coffee chain, which have surged about 20 percent this year, pared gains after rising as much as 2 percent

Reuters April 26, 2019 04:06:03 IST
New coffees, delivery push fuel Starbucks quarterly sales, profit view

New coffees delivery push fuel Starbucks quarterly sales profit view

(Reuters) - Starbucks Corp raised its full-year profit forecast and beat Wall Street estimates for quarterly same-store sales on Thursday, as its new Cloud Macchiato, Matcha tea and cold brews in the United States and speedy delivery network in China drew more customers.

Shares of the world's largest coffee chain, which have surged about 20 percent this year, pared gains after rising as much as 2 percent. They were still on track to hit a record high on Friday.

Its new drinks and a refreshed lunch menu focussed on improving customer traffic during the lean afternoon hours boosted same-store sales by 4 percent at established U.S. cafes. Analysts were expecting sales growth of 3.58 percent.

Starbucks also added 13 percent more active members to its loyalty programme 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.

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 led it to file for an IPO in the United States earlier this week.

Same-store sales rose 2 percent in China/Asia Pacific region, helped by a 2 percent rise in average ticket. Analysts were expecting it to rise 1.5 percent, according to IBES data from Refinitiv.

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.

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 attributable to the company rose to $663.2 million, or 53 cents per share, in the second-quarter ended 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 percent to $6.31 billion, but was slightly below the estimate of $6.32 billion.

(Reporting by Aishwarya Venugopal and Nivedita Balu in Bengaluru; Editing by Arun Koyyur)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.