Financial Performance

Starbucks Same-Store Sales Pick Up Steam

The coffee chain posts a third straight quarter of accelerating sales growth, indicating its streamlining efforts are paying off.
Matthew HellerJanuary 25, 2019
Starbucks Same-Store Sales Pick Up Steam

Starbucks delivered a third straight quarter of accelerating same-store sales growth, with U.S. sales showing particular strength as the coffee chain continues to streamline its operations.

For the first quarter, Starbucks’ comparable store sales rose 4% worldwide, following 1% and 3% gains in the third and fourth quarters of 2018, respectively. The growth was driven by a 3% increase in customer spending per visit.

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The company earned an adjusted 75 cents per share in the first quarter as revenue grew 9% to $6.63 billion. Analysts had expected earnings of 64 cents per share on revenue of $6.49 billion.

“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,” CEO Kevin Johnson said in a news release.

“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,” he added.

Johnson, who took over from longtime leader Howard Schultz nearly two years ago, has focused on accelerating growth in the United States and China and expanding the global reach of the Starbucks brand through an alliance with Nestlé, which has taken over most of the company’s consumer products business.

In the most recent quarter, revenue rose 8% to $4.6 billion in the United States and 45% to $1.2 billion in the China/Asia Pacific region, with same-store sales growth of 4% and 3%, respectively.

The first-quarter results are “a sign that [Johnson’s] focus on operations is beginning to pay off,” MarketWatch said, noting he has “taken a more analytical approach to managing Starbucks by doubling down on the chain’s coffee shops and scaling back some of his predecessor’s ambitions.”

The Seattle Times said merchandising improvements boosted Starbucks’ holiday sales as “holiday drinks went on sale earlier and the company removed some merchandise from the lobby to make a clearer path to gift cards.”

According to Chief Operating Officer Roz Brewer, gift card sales jumped 12% to $2.6 billion in the quarter that ended Dec. 30.

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