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Starbucks beats sales estimates on digital push
STARBUCKS Corp beat quarterly sales estimates on Wednesday, as the world's largest coffee chain's loyalty programme and new delivery options boosted demand and helped fend off competition, especially in the United States and China.
Shares rose 3 per cent in extended trading after the Seattle-based company also forecast 2020 comparable restaurant sales largely above estimates.
Starbucks has beefed up its "Rewards" programme with perks including access to Happy Hours events and the ability to skip lines with a mobile payment option as it battles rising competition from niche independent coffee shops in the United States, as well as startups such as Luckin Coffee in China. The programme's active US membership jumped 15 per cent to 17.6 million in the fourth quarter, and sales at locations open for at least 13 months rose 5 per cent in the fourth quarter ended Sept 29, beating analysts' average forecast of 3.95 per cent, according to IBES data from Refinitiv.
Total net revenue rose 7 per cent to US$6.75 billion, beating the average analyst estimate of US$6.68 billion. Net earnings attributable to the company rose to US$802.9 million, or 67 cents per share, from $US755.8 million, or 56 cents per share, a year earlier. Excluding one-time items, the company earned 70 cents per share, matching Wall Street estimates.
Starbucks estimated fiscal 2020 global comparable restaurant sales would rise 3 per cent to 4 per cent, while analysts had expected a 3.3 per cent increase.
Starbucks plans to open its largest store next month in Chicago, calling it a "Reserve Roastery", with about 35,000 feet of retail space across five floors. REUTERS