News

Starbucks reports 4 percent increase in global same-store sales

January 25, 2019

Starbucks Corporation saw a 4 percent increase of its fiscal first-quarter global same-store sales, driven by 4 percent growth in the U.S., CEO and President Kevin Johnson said Thursday during an earnings call. Although store transactions were flat, customers spent more per visit.

"Starbucks delivered solid operating results in the first quarter, demonstrating continued momentum in our business, as we drive our growth-at-scale agenda with focus and discipline," he said about the quarter that ended Dec. 30, 2018. "We are particularly pleased with the sequential improvement in quarterly comparable store transactions in the U.S., underpinned by our digital initiatives and improved execution of our in-store experience.  With this solid start to the fiscal year, we are on track to deliver on our full-year commitments."

Johnson said the chain will continue to focus on three strategic initiatives to position the brand for long-term success: 

1. Accelerating growth in targeted markets in U.S. and China.
2. Expanding the global reach of the Starbucks brand through its Global Coffee Alliance with Nestle.
3. Increasing shareholder returns.  

"Combined with our efforts to build and amplify the Starbucks brand, we expect these initiatives will position the company to drive predictable, sustainable growth and shareholder returns for years to come," Johnson said.

Expanding delivery services around the world is key to the chain hitting its first initiative of accelerating growth.  Earlier this week, the chain announced that it was expanding delivery service to an additional six cities across the United States and will test it in London. 

"Our partnership with UberEats is gaining momentum and we expect to bring delivery to nearly a quarter of our U.S. company-operated stores by April, including our second market in San Francisco which launched earlier this week," Johnson said during the earnings call. "From a customer perspective, Starbucks Delivers is being seamlessly integrated into the UberEats mobile app enabling full beverage customization and fully integrating into our store operations to ensure a premium Starbucks experience."

Q1 Fiscal 2019 highlights:

• Global comparable store sales increased 4 percent, driven by a 3 percent increase in average ticket.
• Americas and U.S. comparable store sales increased 4 percent, with transactions remaining flat, however.
• CAP comparable store sales increased 3 percent, including 1 percent transaction growth; China comparable store sales increased 1 percent, with transactions down 2 percent
• The company opened 541 stores in Q1, yielding 29,865 stores at the end of the quarter, a 7 percent increase over the prior year.  Over two-thirds of the openings were outside the U.S.; approximately 50 percent were licensed.
• Revenue rose 9 percent to $6.6 billion for the quarter, compared with year-ago figures. Streamline-driven activities include the consolidation of the acquired East China business, partially offset by licensing CPG and foodservice businesses to Nestle following the close of the deal on Aug.26, 2018 and the sale of the Tazo brand.
• GAAP earnings per share of $0.61, down 61 percent over the prior year.
• Starbucks Rewards loyalty program grew to 16.3 million active members in the U.S., up 14 percent year-over-year.