Starbucks profits increase 23% in 4Q

Starbucks profits increase 23% in 4Q

The coffee chain’s same-store sales rise 4 percent in the U.S.

Starbucks Corp. posted a 23-percent increase in net earnings for its Oct. 2-ended fourth quarter, saying it capped the most profitable year in the brand’s 24 years as a public company.

For the quarter, Starbucks posted net earnings of $801 million, or 54 cents per share, up from $652.5 million, or 43 cents per share, a year ago.

For the year, net earnings increased 2 percent to $2.8 billion, or $1.90 per share, compared with $2.76 billion, or $1.82 per share, a year ago.

During the fourth quarter, Starbuck’s same-store sales rose 5 percent in the Americas region, including a 4 percent in the U.S. that was driven by a 6-percent increase in average ticket but offset by a 1-percent decrease in traffic.

Adjusting for the impact related to the redesign of the Starbucks Rewards loyalty program earlier this year, however, the company said average ticket grew 4 percent and traffic increased 1 percent in the U.S.

In the U.S. mobile order and pay also represented 6 percent of transactions during the quarter, up from 5 percent in the third quarter this year.

Howard Schultz, Starbucks CEO and chair. Photo: Starbucks

“Starbucks’ record Q4 and fiscal 2016 financial and operating results in the face of ongoing economic, consumer and geopolitical headwinds, and the significant investments we continue to make in our people and our business, once again demonstrate the power, relevance and resilience of the Starbucks business and brand,” said Howard Schultz, the Seattle-based chain’s chair and CEO.

Globally, comparable sales for the quarter were up 4 percent, including a 1-percent increase in China/Asia Pacific. Comparable sales were down 1 percent in Europe, the Middle East and Africa, or EMEA.

During the fourth quarter, consolidated revenues grew 16 percent to $5.7 billion, driven in part by an extra week in 2016.

Consolidated revenues for the year increased 11 percent to $21.3 billion.

For the year, global same-store sales climbed 5 percent, based on a 6-percent increase in the Americas segment and a 3-percent increase in China/Asia Pacific. Comparable sales for EMEA were flat for the year.

In guidance for 2017, Starbucks said same-store sales are expected to increase in the mid-single-digit range globally, with double-digit revenue growth.

Starbucks ended the year with 25,085 locations in 75 counties worldwide. For 2017, the company plans to open about 2,100 net new stores globally.

Contact Lisa Jennings at [email protected]
Follow her on Twitter: @livetodineout

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