Starbucks Reports Record Sales in Q3 as Customers Rushed Back to Stores

It was a stellar third quarter for coffee giant Starbucks.

The company reported its financial results this week and revealed that it had seen record sales as the impact of coronavirus lessened and more customers headed back to its stores.

For the quarter Starbucks reported that revenue exploded 78% to $7.5 billion, an all-time high for the company. It was also better than the $7.3 billion that was expected by analysts polled by FactSet.

Starbucks reported net income of $1.15 billion for its fiscal third quarter. Adjusted for one-time items, the company earned a record $1.01 per share which was ahead of analysts’ forecast of 78 cents.

Starbucks said its global same-store sales, or sales at locations open at least a year , exploded 73% from the same period last year.

Same-store sales jumped 83% in the U.S. during the fiscal third quarter. According to the company, rural and suburban traffic, which led sales coming out of the pandemic, remained strong, but sales in urban markets also turned positive for the first time since early 2020.

The company also reported that it is serving U.S. customers better with new store formats that prioritize drive-thru and mobile ordering. Starbucks announced last year that it would close 400 stores and replace them with more convenient options.

The company’s CEO Kevin Johnson said the company is about 80% finished with that transformation.

“The improvements we are making to our portfolio today will provide benefits for years to come,” Johnson said.

Despite all this, shares were still down after Wall Street learned that Starbucks had lowered its forecast for sales growth in China. Same-store sales also increased at a lower-than-expected pace of 19% in the country.

The company lowered its full-year sales forecast for China, saying it now expects growth of 18% to 20%, down from 27% to 32%.

According to Johnson however, Starbucks will continue to see robust growth in China as it opens new stores. The company plans to open 600 stores in China in its 2021 fiscal year.
“There should be no misunderstanding of how big and robust our business in China is and will be,” he said.

Starbucks also updated its financial guidance for the full year and now expects global same-store sales growth of 20% to 21%, up from a range of 18% to 23%. It also expects adjusted earnings of $3.20 to $3.25 per share, up from $2.90 to $3.00.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.