🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Starbucks' strong results quash growth woes, shares rise

Published 23/04/2015, 23:39
© Reuters. The sign of a Starbucks store is seen in New York
MCD
-
PNRA
-
SBUX
-

By Lisa Baertlein

(Reuters) - Starbucks Corp (O:SBUX) said on Thursday sales at its coffee shops in the Americas region grew more than expected, boosted by sales of breakfast sandwiches, lunch and new drinks, such as Flat White.

The strong quarterly results from the world's biggest coffee chain helped quiet nagging worries that its growth was cooling, and shares jumped 5.4 percent to $52.12 (34.62 pounds) in after-hours trading.

Starbucks, which is expanding its menus with food, beer and wine, tea drinks and fruit and vegetable smoothies, plans to begin offering delivery service in New York City and Seattle this year.

The Seattle-based company also said it is expanding its U.S. mobile order and pay service after a successful test launch.

The efforts come as U.S. restaurant chains ranging from McDonald's Corp (N:MCD) to Panera Bread Co (O:PNRA) are turning to technology to increase sales, speed up service and connect with younger, tech-savvy consumers.

Sales at Starbucks shops open at least 13 months were up 7 percent in the Americas region for the fiscal second quarter ended March 29. Analysts polled by Consensus Metrix had expected a rise of 5.1 percent.

The Americas quarterly same-store sales included a 2 percent rise in traffic. Starbucks' Americas region, which includes the United States, Canada and Latin America, contributes the majority of company revenue.

Customer visits to Starbucks' Americas-region cafes have decelerated in the last year and a half, causing some investors and analysts to worry that the company's increased focus on food had slowed service.

The chain's quarterly net earnings grew 16 percent to $494.9 million, or 33 cents per share, up from $427 million.

Total revenue was up almost 18 percent to $4.56 billion.

© Reuters. The sign of a Starbucks store is seen in New York

Although the company said the strong dollar is expected to take a bigger bite out of earnings and revenue, it stood by its fiscal 2015 revenue growth forecast of 16 percent to 18 percent as well as its call for full-year earnings, excluding items, of $1.55 to $1.57 per share.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.