Starbucks Corp (NASDAQ:SBUX) stock popped on Friday morning after the coffee giant reported both an earnings and revenue beat after the bell yesterday despite ongoing challenges, including inflation, unionization efforts, and China’s COVID lockdowns.
Seattle-based Starbucks' shares were up about 10% at US$93 per share mid-morning on Friday.
For fiscal 4Q, the company reported record revenue of $8.4 billion, up from $8.1 billion in 4Q 2021 and exceeding the consensus analyst expectation of $8.3 billion.
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The company’s operating income decreased to $1.1 billion for the quarter, compared to $1.3 billion in 4Q 2021.
Starbucks said this was driven by investments and growth in labor, including enhanced store partner wages as well as increased spend on new partner training, coupled with higher commodity and supply chain costs due to inflationary pressures, and partially offset by strategic pricing and sales leverage.
Starbucks posted non-GAAP earnings per share of $0.81, down from $0.99 in the year-ago quarter, but ahead of the expected $0.72.
4Q comparable store sales were up 7% globally, which the company said was primarily driven by an 8% increase in the average ticket.
North America comparable store sales increased 11%, but China sales, where COVID lockdowns impacted consumer spending, decreased 16%.
Interim CEO Howard Schultz said Starbucks saw accelerating demand for its coffee around the world in 4Q and throughout the year, adding that the 4Q results "demonstrate early evidence of the success of our US Reinvention investments."
“Reinvention will touch, and elevate, every aspect of our Starbucks partner, customer and store experiences, and ideally position Starbucks to deliver accelerated, sustainable, long-term, profitable growth and value creation beginning in 2023," Schultz said.
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