General view of a Starbucks coffee shop in London, Britain, March 6, 2020. REUTERS/Henry Nicholls
July 27, 2021
By Praveen Paramasivam and Hilary Russ
(Reuters) -Starbucks Corp’s sales roared back and the coffee chain forecast fourth-quarter sales above Wall Street estimates on Tuesday, as customers flock back to stores after staying away during the height of the pandemic.
The easing of COVID-19 restrictions on travel and restaurant capacity as well as reopening of some offices have boosted sales at Starbucks and other big U.S. restaurants, including Chipotle Mexican Grill and Domino’s Pizza.
Starbucks has also been pushing its digital business – its rewards program grew 48% to 24.2 million members – and new beverages, including three flavors of ready-to-drink coffee, to meet higher demand from the economic reopening.
The company forecast fourth-quarter same-store sales to grow 18% to 21%, expecting strength in the Americas and its international segment. Analysts on average expect growth of 17.5%, according to IBES data from Refinitiv.
But the Delta variant of the coronavirus has triggered a surge of new COVID-19 cases and the reinstatement of mask rules in some places.
Starbucks lowered its fiscal 2021 forecast for China sales growth to 18% to 20% from 27% to 32%, and it dropped its international sales forecast to 15% to 17% from 25% to 30%.
Shares fell 3.6% in extended trading.
Starbucks’ global comparable sales for the third quarter ended June 27 surged 73%, compared with estimates of 69.4% growth.
The company said comparable sales rose 19% in China, its largest growth market, and soared 83% in the United States, cushioning the blow from lockdowns in certain markets.
Excluding certain items, Starbucks earned $1.01 per share, compared with a loss of 46 cents a year earlier. That easily exceeded analysts’ estimates of 78 cents a share.
(Reporting by Praveen Paramasivam in Bengaluru and Hilary Russ in New York; Editing by Shinjini Ganguli and Bill Berkrot)
Source: One America News Network
