Starbucks posts best sales growth in 3 years on China, US

July 26, 2019 09:52
A Starbucks outlet in China. The company has been investing heavily in the market by opening new stores and expanding delivery to cater to increased demand for on-the-go coffee. Photo: Bloomberg

Starbucks Corp reported on Thursday its fastest sales growth in three years on the back of higher traffic at its stores amid an expanded line up of beverages and food offerings in the US and China.

Same-store sales rose 5 percent in China and the Asia-Pacific region in the firm's fiscal third-quarter ended June, beating analysts’ estimates of a 3.45 percent growth, Reuters reports.

In Americas, same-store sales surged 7 percent, against market expectations for 4.43 percent gain.

The growth came as the coffee chain has been trying to make its menu more appealing by adding new beverages such as the Dragon drink and Cocoa Cloud Macchiato, while also expanding the delivery side of its business with new partnerships, the report noted.

The added food options and Nitro Cold brew, a rich coffee that has a foamy texture like beer, lured more customers to stores during lunch hours, which is typically the slowest time of the day.

The company has also been investing heavily in China by opening new stores and expanding delivery to cater to increased demand for on-the-go coffee.

All these efforts helped the coffee chain record  global same-store sales growth of 6 percent for the quarter, the strongest in three years.

Total net revenue for the quarter was up 8.1 percent at US$6.82 billion, surpassing analysts' forecasts of US$6.68 billion.

Earnings per share came in at 78 cents, compared with forecasts of 72 cents of analysts surveyed by Refinitiv.

Following the strong third quarter, Starbucks raised its full-year fiscal 2019 forecasts for revenue and earnings.

The news sent shares of the company surging nearly 6 percent in US after-hours trading.