Starbucks brews up strong first quarter

Starbucks Corp. came out of the gate running in its first quarter, with sales and earnings that beat Street estimates.

The coffee giant earned $761 million, or 61 cents a share, in the quarter ended Dec. 30, compared with $1.57 cents a share in the year-ago period. Adjusted for one-time items, Starbucks earned 75 cents a share, compared with 65 cents a share a year ago. Analysts had expected adjusted EPS of $0.65 cents a share.

Total net revenues rose 9.2% to $6.6 billion, beating Street estimates of $6.5 billion.

Global same-store sales increased 4%, driven by a 3% increase in average ticket. Americas and U.S. comparable store sales increased 4%, with transactions flat. Same-store sales in China increased 1%, with transactions down 2%.

“Starbucks delivered solid operating results in the first quarter, demonstrating continued momentum in our business, as we drive our growth-at-scale agenda with focus and discipline,” said Kevin Johnson, president and CEO. “We are particularly pleased with the sequential improvement in quarterly comparable store transactions in the U.S., underpinned by our digital initiatives and improved execution of our in-store experience.”

Given what it termed its “strong start to the year,” the company kept its previous guidance of a GAAP revenue growth between 5% and 7% and an adjusted EPS between $2.68 and $2.73 for fiscal 2019.

Membership in Starbucks’ Rewards loyalty program rose 14% in the quarter, growing to 16.3 million active U.S. members.

Starbucks opened 541 net new stores in the first quarter, giving it a total of 29,865, a 7% increase over the prior year. Over two-thirds of the net new store openings were outside the United States, and approximately 50% were licensed.