By Heather Haddon
Starbucks Corp. said it expects profit to increase this year as sales recover at cafes that it is operating more efficiently than before the coronavirus pandemic.
The coffee giant's sales plummeted last year as it closed stores first in China then around the world as the pandemic took hold. Starbucks has steadily reopened stores since last summer, when pandemic-related restrictions on business and public gatherings began to ease in parts of the U.S. It has also pushed mobile ordering of beverages and increasing its to-go options.
Starbucks said Tuesday that global same-store sales in its second-quarter ending in March increased 15% from the same period last year. International markets accounted for much of the growth. Same-store sales in the U.S. rose 9%.
Starbucks said it expects profit to rise more this year than it previously expected. The chain updated its full-year guidance for earnings of $2.65 to $2.75 a share, up from $2.42 to $2.62 previously. The chain also bumped up its projections for store margins and sales.
The coffee giant is among restaurant companies working to draw consumers back from the home-brewing habits they picked up during the pandemic. Nestlé SA, the Swiss packaged-food company that makes Starbucks-branded products in addition to its own, said last week that at-home coffee sales drove its best quarterly sales growth in almost a decade.
Starbucks has also drawn more people into its online loyalty program as it has sought to boost in-person sales. The chain said it had 23 million U.S. members in the latest quarter, a 18% increase from last year. Members receive deals through repeat purchases.
The chain is also developing more to-go oriented stores as it phases out some sit-down locations. Starbucks said it closed 300 stores in the U.S. and Canada during the quarter as part of this shift.
For the quarter, Starbucks reported earnings adjusted for one-time items of 62 cents a share, outpacing expectations from analysts polled by FactSet for earnings of 53 cents a share by that metric. Sales of $6.7 billion neared expectations.
Write to Heather Haddon at email@example.com
(END) Dow Jones Newswires