Starbucks Shares Soar on Stellar Earnings Report

Shares of Starbucks were moving higher after the coffee powerhouse reported first quarter financial results last week for the period ended December 30th.

The company reported that net revenue had grown by 9.2% to hit $6.63 billion. Operating income at $1.015 billion was a 9% decrease compared to $1.116 billion for the same period in the previous year.

CEO Kevin Johnson remarked, “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.

“We are particularly pleased with the sequential improvement in quarterly comparable store transactions in the US, underpinned by our digital initiatives and improved execution of our in-store experience. With this solid start to the fiscal year, we are on track to deliver on our full-year commitments.”

“With this solid start to the fiscal year, we are on track to deliver on our full-year commitments.”

Starbucks saw global comparable store sales grow 4%, driven by a 3% increase in average ticket. There were 541 net shops opened during the quarter and 29,865 outlets, representing a 7% increase YOY.

Johnson also said, “Comprehensive efforts to streamline our business have allowed us to focus on three key strategic initiatives that position Starbucks for long-term success: accelerating growth in our targeted markets of the US and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestlé, and increasing shareholder returns.

“Combined with our efforts to build and amplify the Starbucks brand, we expect these initiatives will position the company to drive predictable, sustainable growth and shareholder returns for years to come.”

He also said, “Last month we were pleased to meet with many of you in New York, not only to showcase our latest Starbucks Reserve Roastery but to also discuss the next chapter in Starbucks growth agenda, which we call growth at scale. We shared with you our strategy to streamline the business, drive growth in the key markets of U.S. and China, expand our global reach to the global coffee alliance, while simultaneously returning significant capital to our shareholders. The strategy is working as evidenced by our Q1 results and we remain confident in the longer term outlook for the business.

“Integral to our growth scale strategy is the higher level of focus and discipline to drive predictable, sustainable long-term growth and shareholder returns. The positive business momentum that we experienced in the fourth quarter of fiscal ’18 clearly sustained throughout Q1. The strength of our results in Q1 has further reinforced the confidence and conviction we have, both near-term and long-term in our strategy.”

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