USA – Starbucks, the world’s largest coffeehouse chain, is now expecting fiscal earnings per share to be in a range of US$2.97 to US$3.02, up from a previous guidance of US$2.65 to US$2.75 per share following an impressive third quarter.
According to a statement from Starbucks, net income in the third quarter ended June 27 was US$1.15 billion up from a net loss of US$678.4 million recorded in the same period a year ago.
Quarterly revenues grew 78% to US$7.5 billion driven by a 73% increase in comparable-store sales, primarily from lapping the impact of pandemic-related disruption last year, and to strength in US company-operated sales in the current year.
In Starbucks’ Americas business unit, quarterly revenues were US$5.4 billion, up 92% from the same period a year ago and 13% from two years ago.
Operating income also rose to US$1.3 billion, compared to an operating loss of US$404.9 million a year ago and an operating income of US$1.07 billion in the third quarter of 2019.
“Over the last two years, we’ve seen a meaningful increase in customizations, such as adding cold foam or a shot of espresso,” said Kevin Johnson, president and chief executive officer of Starbucks, in a July 27 conference call with analysts.
“Additionally, alternative dairy offerings represent nearly 25% of milk-related beverage sales, up from the prior year. These innovative offerings in cold and alternative dairy are particularly attractive to millennial and Gen Z customers and are aligned with our focus on the well-being of people and the planet.”
The global reach of the Starbucks brands is also set to be extended after the coffeehouse chain extended its partnership with Nestlé to bring ready-to-drink coffee beverages to select markets across South-East Asia, Oceania, and Latin America.
At a time of rising inflation, food companies such as PepsiCo, Unilever, and Conagra Brands have been forced to seriously consider raising the prices of their products.
Customers should however not expect Starbucks products to go up anytime soon as the company has locked in the price of its coffee beans for the next 14 months to help protect against the impact of higher prices.
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