Starbucks Tops Expectations in Q4 Revenue

Shares of coffee giant Starbucks were headed higher this week after the company reported quarterly revenue on Wednesday that was higher than what analysts had expected.

Shares of the company jumped more than 2% in extended trading.

“Our U.S. business delivered 6% comparable store sales growth in the fourth quarter, while China grew comparable store sales by 5% and total transactions by 13%,” said the company’s CEO Kevin Johnson.

For the fourth quarter, Starbucks reported adjusted earnings per share of 70 cents compared to 70 cents expected. Revenue at $6.75 billion was higher than the $6.68 billion expected. Global same store sales saw a 5% jump compared to the 4% expected.

Both the U.S. and China, its two biggest markets, reported strong same-store sales and increasing traffic.

Starbucks now counts 17.6 million active rewards members in the U.S. The coffee chain opened more than 600 net new cafes in China during fiscal 2019 and now has more than 4,000 locations across the country.

Looking ahead to fiscal 2020, Starbucks expects to add 2,000 net new Starbucks locations worldwide, with continued expansion in the U.S. and China. It expects revenue growth in a range of 6% to 8% and global same-store sales growth in a range of 3% to 4%.

“Our strong performance throughout fiscal 2019 gives us confidence in a robust operating outlook for fiscal 2020,” Johnson stated.

The company expects fiscal 2020 adjusted, or non-GAAP, earnings per share in a range of $3 to $3.05. This is compared to the $3.08 that analysts were expecting.

Johnson said on the earnings call, “For the fiscal year, Starbucks delivered record results in both total net revenues and non-GAAP EPS. Total net revenues were $26.5 billion, up 10% over the prior year, when adjusted for Streamline activities and foreign exchange. This included 5% global comp sales growth for the year and over 1,900 net new stores globally, yielding a record non-GAAP EPS of $2.83 for fiscal year 2019, up 17% versus prior year.”
He added, “With more than 31,000 stores in 82 markets, welcoming over 100 million customer occasions each week and enabling over 1 billion digital customer occasions per year, Starbucks is a part of our customers’ every day routines around the world and I applaud the 400,000 green apron partners who deliver a premium Starbucks Experience to every customer they serve. Because of our partners, we are achieving even higher levels of customer loyalty and brand preference.”

Disclaimer: We have no position in Starbucks Corporation (NASDAQ: SBUX) and have not been compensated for this article.