Starbucks Corp (NASDAQ:SBUX, XETRA:SRB) reported quarterly revenue above Wall Street estimates on Wednesday, driven by its first US comparable sales growth in nearly two years and stronger traffic across key international markets, including China.
The coffee chain posted net revenues of $9.9 billion for its fiscal first quarter, up 6% from a year earlier and ahead of analysts’ estimate of $9.65 billion. Global comparable store sales rose 4%, reflecting a 3% increase in transactions and a 1% rise in average ticket size.
In the US, comparable store sales climbed 4%, far exceeding expectations of a 1.88% increase and marking the company’s first quarter of US transaction growth in eight quarters. International comparable sales rose 5%, led by China, where same-store sales increased 7% on stronger customer traffic.
CEO Brian Niccol said the company’s “Back to Starbucks” strategy is running ahead of schedule, as it focuses on simplifying operations and improving in-store experiences. As part of the effort, Starbucks closed 165 underperforming stores during the quarter.
Adjusted earnings per share fell 19% year-on-year to $0.56, missing analysts’ estimate of $0.59, while the company’s operating margin declined 180 basis points to 10.1%.
North America revenue rose 3% to $7.28 billion, though operating margin in the segment fell 480 basis points to 11.9%. International revenue increased 10% to $2.64 billion, with operating margin improving by 100 basis points to 13.7%. Channel Development revenue climbed 20% to $522.7 million.
For the full fiscal year, Starbucks forecast non-GAAP earnings per share of $2.15 to $2.40 and said comparable store sales are expected to rise at least 3%. The company also expects consolidated operating margin to improve slightly year-on-year and plans to open about 600 to 650 net new coffeehouses.
Shares of Starbucks were up 6% in morning trading.