Starbucks reported record revenue of $9.38 billion in the fiscal fourth quarter.
HECTOR RETAMAL/AFP via Getty Images
Starbucks
Starbucks
stock surged Thursday after the coffee chain posted fourth-quarter results that came in stronger than expected and teased details of a new strategy.
Starbucks
(ticker: SBUX) reported earnings of $1.06 a share on record revenue of $9.38 billion in the quarter ending Oct. 1. Analysts polled by FactSet were predicting earnings of 97 cents a share and sales at $9.29 billion.
Global same-store sales jumped 8%, driven by a 4% rise in the average customer check and a 3% rise in transactions. Same-store sales in North America and the U.S. also climbed 8% but higher checks, which rose 6%, had a greater impact, while transactions rose 2%.
“As we enter the current year, in the face of macro uncertainty, we remain confident in the momentum throughout our business and headroom globally. We expect sustained momentum throughout the company for years to come,” CEO Laxman Narasimhan said.
Starbucks expects revenue to grow between 10% and 12% this fiscal year, and sees it coming in on the low end of that range. Earnings per share growth will range between 15% and 20%, in line with the company’s long-term guidance.
Global same-store sales are forecast to increase between 5% and 7%, below the company’s long-term guidance for growth between 7% and 9%.
Starbucks has scheduled an investor update for 4 p.m. Eastern time, where the company will detail a new strategic update called Triple-Shot Reinvention.
Narasimhan teased a few elements from the update during Thursday morning’s call. The plan hinges around elevating the Starbucks brand, scaling the company’s digital performance, becoming “truly global,” reinvigorating partner culture, and unlocking efficiencies, he said. Management also said that the company was planning on saving $3 billion in cost efficiencies over the next three years, with a big portion coming from the supply chain.
Initiatives that sprung from 2022’s reinvention plan, including rolling out new equipment and improving employee scheduling, are “on track,” Narasimhan said.
“While the F4Q update was encouraging, we expect shares will respond more so to FY24 guidance…and reinvention plan,” wrote Citi analyst Jon Tower in a note Thursday.
Shares of Starbucks were 12% higher ahead of the opening bell. The stock has fallen 8% this year as of Wednesday’s close.
Write to Sabrina Escobar at [email protected]
Read the full article here