Starbucks profit tops analysts’ estimates as US sales gain

Bloomberg

Starbucks Corp. posted earnings that topped analysts’ estimates as new menu items and digital efforts like mobile ordering helped its US business defy a restaurant-industry slowdown. Profit rose to 56 cents a share, excluding some items, in the most recent quarter. That topped analysts’ average prediction of 55 cents.
The world’s largest coffee-shop operator has been fueling sales with technology like mobile order and pay, which speeds service at cafes. The company also has introduced new drinks, such as coconut-milk mocha macchiatos and cold-brew beverages, while widening and improving its food selection. Same-store sales rose 5 percent in the Americas region, matching the average estimate of analysts polled by Consensus Metrix.
“There was some thought that they might not be able to perform as well as they did in the quarter,” said Jack Russo, an analyst at Edward Jones. “Some other really high-profile consumer companies have been reporting some slowing down.”
The company also is funneling more of its cash back to investors. Starbucks raised its quarterly dividend to 25 cents a share from 20 cents. It will be paid Dec. 2 to shareholders of record as of Nov. 17. The stock rose as much as 3.8 percent to $53.74 in New York. Through Thursday’s close, Starbucks had lost 14 percent this year.
REVENUE GAINS
Revenue climbed 16 percent to $5.71 billion in Starbucks’s fiscal fourth quarter, which ended Oct. 2, the Seattle-based company said in a statement Thursday. Analysts estimated $5.69 billion, on average.
Mobile payments accounted for 25 percent of domestic transactions, up from 20 percent a year ago, as the company offers new features such as favorite locations and orders, according to Chief Operating Officer Kevin Johnson. Rewards membership also rose from last year.
In the US, where Starbucks has about 12,900 cafes, the latte seller is trying to improve the quality and variety of its food.