Starbucks beat Wall Street targets for fourth-quarter results as strong demand for its pricey coffees and cold drinks in North America offset a feeble recovery in China.
The global coffee chain has benefited from a younger, more affluent consumer base despite the wider US restaurant industry grappling with a slowdown as sticky inflation prompts people to rethink dining out.
Traffic at the coffee chain's US locations jumped throughout the quarter, data from Placer.ai showed, boosted by the fanfare around the late-August return of its iconic fall season staple - the Pumpkin Spice Latte.
There was a 20% surge in traffic on the day of the launch, and it continued to climb in the weeks after, the data showed.
Growth Drivers
Starbucks has also leaned on its breakfast sandwiches, wraps and bakery items to drive up customer spending at stores. Average ticket in the US – or the average spending per customer on a visit – jumped 6% in the quarter.
That, coupled with a 2% rise in customer transactions, propelled US same-store sales 8% higher.
Still, China sales came in just 5% higher – much smaller than the 46% surge seen in the previous quarter – suggesting that trends in the company's second-largest market were not recovering as robustly as expected.
Ticket fell 3% in China, indicating consumers were spending less at the coffee chain, as it also faces tough competition from local rivals such as Luckin Coffee and Manner Coffee.
Global comparable sales at Starbucks climbed 8% in the fiscal fourth quarter, compared with analysts' expectations for a 6.56% rise, according to LSEG IBES data.
Excluding items, Starbucks posted a per-share profit of $1.06 for the quarter ended 1 October, surpassing estimates of 97 cents.
