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Shares of the Seattle, Washington-based company rose marginally in extended trading as it topped Wall Street estimates for quarterly profit, thanks to higher prices and easing cost inflation.
While Starbucks (NASDAQ:SBUX) has rushed to cash in on its younger, wealthier customer base by launching new drinks in the United States, including a Chocolate Java Mint Frappuccino and White Chocolate Macadamia Cream Cold Brew this year, it saw quarterly transactions climb just 1% in North America.
However, the company recorded a sharp recovery in China, with comparable sales surging 46% even as average ticket – or the average amount spent per customer on a visit – declined 1% in the quarter.
Mobility levels in China – tracked through subway rides – were up roughly 128% in the second quarter, returning to 2019 levels, according to analysts at BofA Global Research who noted sales trends at Starbucks typically coincide with subway traffic data.
Global comparable sales at Starbucks rose 10% in the third quarter, compared with analysts’ expectations for a 11.8% rise, according to Refinitiv IBES data.
In its international segment, same-store sales rose 24%, also missing estimates of 25.7%.
Still, the company expanded its operating margin to 17.4% in the quarter ended July 2, from 16.9% in the prior year, as easing costs of commodities helped offset impact from increased investment in wages and worker benefits.
Excluding items, Starbucks posted a profit of $1 per share, beating analysts’ average estimate of 95 cents.
