Starbucks, the world’s biggest coffee-shop chain, posted fiscal third-quarter profit that rose 22 per cent after its sales gained in the Americas.
Net income increased to $626.7 million, or 41 cents a share, the Seattle-based company said in a statement on Thursday. Excluding some items, profit was 42 cents a share. Analysts estimated 41 cents, on average.
Chief executive officer Howard Schultz has been expanding beyond Starbucks’ core coffee beverages in a bid to boost domestic sales. The company is working to sell more Teavana tea while also adding new lunch items and expanding its cold-brew coffee across the U.S. and Canada. Same-store sales rose 8 per cent in the Americas region, which includes the U.S., Canada and Latin America, helped by a 4 per cent increase in customer traffic. Analysts had projected a 6.3 percent per cent sales gain, according to Consensus Metrix.
“That increase in traffic is representative of the fact that we are reaching out to more and more customers,” Chief Operating Officer Kevin Johnson said in an interview.
Total revenue climbed 18 percent to $4.88 billion in the quarter ended 28 June, topping projections.
Starbucks has been focused on selling more food in the U.S. In July, it introduced a new Omega-3 bistro box with salmon spread and trail mix, as well as a barbecue beef brisket sandwich. It’s bringing French cookies to some New York locations.
The coffee company is trying to increase sales by adding to its digital services. Earlier this year, Starbucks said it was expanding mobile ordering, which allows customers to order ahead of time. It’s also experimenting with offering delivery.
The company earlier this month said it’s raising prices on some drinks, including brewed coffee, by as much as 20 cents in the U.S. The hikes, which vary by market, may increase the average amount customers spend by about 1 per cent, Starbucks said.
Starbucks also said Thursday that its board gave it permission to buy back 50 million more shares of stock. The authorization has no expiration date and is in addition to 11 million shares remaining on its current allowance.
Bloomberg News, edited by ESM
