Shares of Starbucks (SBUX) jumped more than 10% in early trading Thursday after the company reported better-than-expected earnings for its fiscal fourth quarter, as U.S. consumers continued to splurge on coffee and beverages despite inflation .
Revenue reached a record $9.37 billion, up 11% from the same quarter last year. Net income jumped nearly 39% to $1.22 billion, or $1.06 per diluted share, which was well above consensus estimates of 97 cents per share provided by Visible Alpha.
Sales growth was driven by an 8% increase in same-store sales in North America, as US consumers continued to spend on coffee and drinks despite more expensive beverages. This reflects robust consumer spending that boosted GDP growth in the third quarter, as the U.S. consumer remained resilient despite continued high inflation and rising interest rates.
In China, which is the company's second-largest market, same-store sales increased 5% in the latest quarter from a year earlier. However, unlike in North America, where the average ticket, or the amount spent by customers per transaction, increased by 6% from the previous year, in China the average ticket fell by 3%. Chinese consumers remain cautious and hesitant to spend amid economic difficulties in China.
Starbucks continued to expand its global presence, opening 816 new stores in the last quarter, bringing the global total to more than 38,000, with more than half outside the United States, China and the United States. United States, the company's two largest markets. – together made up just over 60% of the company’s global footprint.
“We completed our fourth quarter and a strong full year, consistent with the upper end of our full-year guidance,” Starbucks CEO Laxman Narasimhan said in a statement. Press. “As we enter the current year, in the face of macroeconomic uncertainty, we remain confident in our business momentum and global headroom.”
Before Winning Thursday, the Starbucks shares had been trading down nearly 10% for the year. They have now fully recovered their losses since the start of the year.
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