Starbucks earnings beat, fueled by strong cold beverage sales in the U.S.
- Starbucks topped Wall Street's estimates for its fiscal third-quarter earnings and revenue.
- The company also raised its forecast for fiscal 2021 earnings per share.
- Shares of Starbucks have risen 17% this year, giving it a market value of $148 billion.
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Starbucks on Tuesday reported soaring cold drink sales in the United States, fueling an earnings and revenue beat for the company.
But the company also warned of a slower recovery in China, its second-largest market. It lowered its full-year forecast for the country's same-store sales growth, despite raising its overall outlook for fiscal 2021 earnings per share.
The stock fell 3.2% in extended trading after hitting a 52-week high before the markets closed.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.01 adjusted vs. 78 cents expected
- Revenue: $7.5 billion vs. $7.29 billion expected
The coffee giant reported fiscal third-quarter net income of $1.15 billion, or 97 cents per share, up from a net loss of $678.4 million, or 58 cents per share a year earlier.
Excluding items, Starbucks earned $1.01 per share, topping the 78 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 78% to $7.5 billion, beating expectations of $7.29 billion. Worldwide, same-store sales surged 73%. A year ago, the company's global same-store sales plummeted 40% during the quarter as the global pandemic prompted in lockdowns in some regions.
In the U.S., Starbucks' largest market, same-store sales climbed 83%. On a two-year basis, the market's same-store sales rose 10%. Nearly three-quarters of the company's drink sales came from cold beverages, like its Nitro cold brew.
Outside of the U.S., Starbucks' same-store sales jumped 41%, fueled by 55% growth in customer traffic. China reported same-store sales growth of 19%. A year ago, the country's same-store sales fell 19%.
For fiscal 2021, the company raised its earnings per share outlook to a range of $2.97 to $3.02, up from its prior range of $2.65 to $2.75. On an adjusted basis, it's expected earnings per share of $3.20 to $3.25, up from the prior range of $2.90 to $3. The fiscal year includes a 53rd week this year, which is expected to add 10 cents to the company's earnings per share.
Starbucks also narrowed its outlook for global same-store sales growth for the full year. It now expects that metric to rise 20% to 21%, compared with a prior range of 18% to 23%. The company also predicted slowing same-store sales in China, where it previously predicted growth of 27% to 32%. Now, however, it's forecasting same-store sales growth of 18% to 20%.
In the United States, Starbucks now expects sales growth of 21% to 22% for cafes open at least 13 months, on the higher end of its prior range of 17% to 22%.
This is a breaking news story. Please check back for updates.
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