Starbucks Beats 4Q Forecasts

Starbucks

SEATTLE (AP) — A jump in U.S. sales helped Starbucks end its fiscal year on a high note. The company said its same-store sales — a critical measure for retailers — rose four percent in the U.S. in its fiscal fourth quarter. That helped its global same-store sales rise three percent, ahead of analysts' expectations, according to FactSet. 

"These results provide encouraging evidence that our plan is working," Starbucks CEO Kevin Johnson said in a conference call with investors. Seattle-based Starbucks said its U.S. customers spent more during the quarter, partly because of a price increase for brewed coffee the company announced in June. 

Starbucks Chief Operating Officer Rosalind Brewer said beverage sales were responsible for most of the increase. Starbucks saw stronger sales of cold drinks, such as its line of fruity Refreshers. A bigger social media effort for Starbucks' popular Pumpkin Spice Latte also paid off, Brewer said.

Brewer said a new effort to decrease the amount of time employees spend on administrative tasks so they can spend more time handling customers is increasing customer satisfaction and return visits. The company saw a 15 percent increase in the number of U.S. loyalty program members during the July-September period, up to 15.3 million.

Starbucks reported net income of $755.8 million for the quarter, for a profit of 56 cents per share. Earnings, adjusted for non-recurring costs, were 62 cents per share. That beat Wall Street's expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 59 cents per share. 

The coffee chain posted revenue of $6.3 billion in the period, which also beat forecasts. For the full year, revenue was up 10 percent to a record $24.7 billion. Adjusted earnings rose 17 percent to $2.42 per share. 

Starbucks had been struggling with sluggish sales in its biggest markets. In June, the company announced it would close 150 underperforming U.S. stores next year, up from the usual rate of 50 closings per year.

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