Starbucks on Thursday reported quarterly earnings that beat analysts’ expectations but fell slightly short on sales, despite customers spending more in its stores.
Shares of the company were up less than 1% in extended trading.
“We are especially pleased with our comparable store sales growth in our two lead markets, the U.S. and China, where we are also continuing to drive strong new store development with industry-leading returns,” CEO Kevin Johnson said in a statement.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 60 cents, adjusted, vs. 56 cents expected
- Revenue: $6.31 billion vs. $6.32 billion expected
- Same-store sales: 3% vs. 2.9% expected
The coffee chain reported fiscal second-quarter net income of $663.2 million, or 53 cents per share, up from $660.1 million, or 47 cents per share, a year earlier.
Excluding the sale of its Tazo brand, costs related to its licensing deal with Nestle and other items, Starbucks earned 60 cents per share, topping the 56 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 5% to $6.31 billion, missing expectations of $6.32 billion.
The company reported same-store sales growth of 3%, beating Wall Street’s estimates of 2.9%. Starbucks attributed the growth to a 3% increase in average ticket. In the U.S., sales at stores open at least a year grew by 4%. The company even saw same-store sales growth of 3% in China, where the company is facing increased competition from Luckin Coffee and a slowing economy.
The company raised its full-year earnings forecast. It is now expects adjusted, or non-GAAP, earnings per share in the range of $2.75 to $2.79, up from a prior range of $2.68 to $2.73. Analysts were forecasting 2019 earnings of $2.71 per share.
Starbucks’ loyalty program grew to 16.8 million active members in the U.S., up 13% from last year. The Seattle-based company recently revamped the program, offering a wider range of redemption options for members. The changes also mean that customers have to spend more to earn a free drink. Unlike the last time that it made major changes to its loyalty program back in 2016, Starbucks has largely avoided social media backlash.