Holidays and a viral bear cup drive strong quarterly sales at Starbucks
Starbucks reported strong fiscal first quarter as holiday drinks and a viral bear cup helped drive sales.
Same-store sales – or sales at locations open at least a year – rose 4% for the October-December period. That was higher than the 2.3% that Wall Street was expecting, according to analysts polled by FactSet.
There was a 3% increase in transactions and a 1% increase in spending per visit. That was the best U.S. performance for the company in two years.
Shares of the Seattle coffee giant jumped more than 9% before the opening bell Wednesday.
Revenue rose 6% to $9.9 billion for the quarter, also beating Wall Street expectations for $9.65 billion.
Starbucks had been hoping that a strong holiday would reintroduce many customers to its stores, where it is trying to improve service by adding staff and equipment and creating a warmer, more welcoming environment. But even Starbucks was startled by customer demand for its $29.95 glass bear-shaped cups, which sold out almost immediately after they were introduced in November.
The store revamps have been costly for the company, which said its margins have been pressured by investments in labor as well as tariffs on coffee.
Adjusted for one-time items, Starbucks earned 56 cents per share in the quarter. That was lower than the 59-cent profit Wall Street was expecting.
Starbucks U.S. traffic was up despite a strike by more than 1,000 unionized Starbucks workers, who hoped to disrupt Starbucks’ Red Cup Day, which is typically one of the company’s busiest days of the year. Since 2018, Starbucks has given out free, reusable cups on that day to customers who buy a holiday drink. The strike closed some stores, but only briefly.