SEATTLE (AP) – A jump in U.S. sales helped Starbucks end its fiscal year on a high note.
Starbucks Corp. said its same-store sales – a critical measure for retailers – rose 4 percent in the U.S. in its fiscal fourth quarter. That helped its global same-store sales rise 3 percent, ahead of analysts’ expectations, according to FactSet.
Same-store sales rose 1 percent in China, another critical market for the coffee chain and an improvement from the prior quarter.
“These results provide encouraging evidence that our plan is working,” Starbucks CEO Kevin Johnson said in a conference call with investors.
Starbucks shares rose 8 percent in after-hours trading.
Seattle-based Starbucks said its U.S. customers spent more during the quarter, partly because of a price increase for brewed coffee the company announced in June.
Starbucks Chief Operating Officer Rosalind Brewer said beverage sales were responsible for most of the increase in U.S. same-stores sales. Starbucks saw stronger sales of cold drinks, such as its line of fruity Refreshers. A bigger social media effort for Starbucks’ popular Pumpkin Spice Latte also paid off, Brewer said.
Brewer said a new effort to decrease the amount of time employees spend on administrative tasks so they can spend more time handling customers is increasing customer satisfaction and return visits. The company saw a 15 percent increase in the number of U.S. loyalty program members during the July-September period, up to 15.3 million.
Starbucks reported net income of $755.8 million for the quarter, for a profit of 56 cents per share. Earnings, adjusted for non-recurring costs, were 62 cents per share.
That beat Wall Street’s expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 59 cents per share.
The coffee chain posted revenue of $6.3 billion in the period, which also beat forecasts.
For the full year, revenue was up 10 percent to a record $24.7 billion. Adjusted earnings rose 17 percent to $2.42 per share.
Starbucks had been struggling with sluggish sales in its biggest markets. In June, the company announced it would close 150 underperforming U.S. stores next year, up from the usual rate of 50 closings per year.
In Asia, Starbucks is rapidly opening stores to improve sales. Starbucks plans to add 2,100 new stores in 2019; more than half of those will be in Asia. Starbucks also partnered with Alibaba in August to improve its digital platform and provide delivery. All Starbucks stores in Shanghai, Beijing and 11 other cities now offer delivery, the company said.
Starbucks said it expects its global same-store sales to be at the low end of a 3 to 5 percent increase in its 2019 fiscal year. It expects global revenue to rise 5 to 7 percent, with adjusted earnings of $2.61 to $2.66 per share.
Copyright 2018 The Associated Press.