Starbucks U.S. sales climb as customers spend more on pricey drinks

by | Nov 3, 2022 | Business

Starbucks on Thursday reported quarterly earnings and revenue that topped analysts’ estimates, fueled by U.S. customers spending more on iced coffee drinks and Pumpkin Spice Lattes.The Seattle-based coffee company also said U.S. traffic improved in the quarter, and has nearly bounced back to 2019 levels.”Despite elevated pricing actions taken throughout the year, daily store traffic in the U.S. reached approximately 95% pre-pandemic levels in September fueled by the wildly successful fall promotion,” Chief Financial Officer Rachel Ruggeri said on the company’s quarterly conference call.Shares rose 2.7% in after-hours trading.Here’s what the company reported for the quarter ended Oct. 2 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:Earnings per share: 81 cents adjusted vs. 72 cents expectedRevenue: $8.41 billion vs. $8.31 billion expectedNet sales for the period rose 3.3% to $8.41 billion. Global same-store sales increased 7%, fueled by increased spending in its home market.In the United States, Starbucks reported same-store sales growth of 11%, which was the result of people spending more on average and a slight uptick in traffic. Prices were also up 6% from a year ago, but executives said they don’t plan to raise prices anymore for the time being.Cold beverages accounted for more than three-quarters of beverage sales at U.S. company-owned cafes. Starbucks said customers are more likely to add pricy syrups, cold foam and dairy substitutes to cold drinks, driving up their price. But customers are also still buying hot coffee drinks. Pumpkin Spice Latte sales climbed 70% compared with the year-ago period, according to Starbucks North American President Sara Trilling.The company’s loyalty program saw its active membership climb 16% to 28.7 million people in the quarter.┬áIn September, the Seattle-based company unveiled a broad plan to reinvent its business to address changing consumer and employee needs. Some of those updates will include new equipment to make cold drinks more easily.The ornate art decor of the Starbucks coffee chain in Xujiahui district attracts customers’ attention in Shanghai, China, May 12, 2021.Costfoto | Barcroft Media | Getty ImagesOutside the U.S., Covid-19 restrictions in China continued to weigh on Starbucks’ international performance. The company’s international same-store sales fell 5%, which wasn’t as steep as the 7.1% expected decline, according to Street …

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