Starbucks’ president and CEO Kevin Johnson speaks during a press conference in Shanghai on August 2, 2018.
AFP | Getty Images
Starbucks on Tuesday reported mixed quarterly results and raised its full-year forecast for earnings and revenue.
While the company’s earnings topped Wall Street’s expectations, its revenue missed estimates, dragged down by some international markets’ slower recovery.
Shares of the company dropped nearly 2% in extended trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 62 cents adjusted vs. 53 cents expected
- Revenue: $6.7 billion vs. $6.8 billion expected
Starbucks reported fiscal second-quarter net income of $659.4 million, or 56 cents per share, up from $328.4 million, or 28 cents per share a year earlier.
Excluding items, the coffee chain earned 62 cents per share, topping the 53 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 11% to $6.7 billion, missing expectations of $6.8 billion. Global same-store sales grew by 15% as the company lapped a decline of 10% from the year-ago period.
U.S. same-store sales rose 9%, returning to pre-pandemic levels. A year ago, same-store sales in Starbucks’ home market fell 3% as lockdowns were implemented across the United States. This quarter, customers bought larger coffee orders, sending the average ticket up 21%. Traffic, however, is still down by 10%.
Outside of the U.S., same-store sales rose 35% despite many European countries extending lockdowns. In China, Starbucks’ second-largest market, same-store sales surged 91% as it faced comparisons to last year’s 50% plummet during the same period. Transactions in China soared 93% in the quarter, but average ticket fell 1%.
The company opened five net new cafes during the quarter. That includes the impact of closing roughly 300 locations in the U.S. and Canada, which it previously announced in June as part of a broader strategy to update its restaurant footprint.
For all of fiscal 2021, Starbucks now expects to earn $2.65 to $2.75 per share, up from its prior range of $2.42 to $2.62 per share. It’s expecting earnings on an adjusted basis of $2.90 to $3 per share, up from its previous outlook of $2.70 to $2.90 per share. Analysts were expecting earnings per share of $2.85 for the fiscal year.
The company also raised its full-year outlook for revenue to a range of $28.5 billion to $29.3 billion, up from a prior range of $28 billion to $29 billion. Wall Street was forecasting revenue of $28.6 billion. Fiscal 2021 includes a 53rd week, which Starbucks expects will add about $500 million in revenue.