Starbucks reported a 11% increase in sales for the first quarter, beating analysts′ expectations
Coffee chain Starbucks reported first quarter results with consolidated Net Revenues Up 14% to $8.7 Billion while comparable store sales were up 11% globally primarily driven by a 6% increase in comparable transactions and a 4% increase in average ticket.
North America comparable store sales increased 12%, driven by a 6% increase in comparable transactions and a 5% increase in average ticket.
Net revenues for the International segment grew 9% to $1.9 billion, primarily driven by growth in stores revenue including higher product sales and royalty revenues. These increases were partially offset by approximately 10% unfavorable impact from foreign currency translation.
The company opened 464 net new stores in Q1, inclusive of closures across North America and International as part of ongoing efforts to strengthen the portfolio, ending the period with 36,634 stores globally: 51% company-operated and 49% licensed
At the end of the first quarter, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 16,044 and 6,243 stores in the U.S. and China, respectively.
Operating margin was 15.2% increased from 12.4% in the prior year, primarily driven by sales leverage, pricing, productivity improvement and gain on the sale of Seattle’s Best Coffee brand. Operating income increased to $1.32B in Q1 FY23 compared to $949 million in Q1 FY22
This expansion was partially offset by previously committed investments in labor, including enhanced store partner wages and benefits, increased general and administrative costs and inflationary pressures.
“I am so proud of our outstanding second quarter performance, underscoring strength in both topline and margin globally. This momentum was made possible by the investments we are making in our stores and partners, and allowed us to continue unlocking capital to further reinvest in our business,” commented Rachel Ruggeri, chief financial officer.
“As we begin on this next step in our journey, I’m confident that, together with our partners, our execution against our Reinvention plan and broader strategies will position us in our new era,” Ruggeri added.
Earnings per share came at $0.79, a 36% increase compared to the same quarter form last year while net income attributable to Starbucks was$0.9B, +35% compared to Q1 2022.
Starbucks reaffirmed its outlook for the fiscal year, projecting revenue growth of 10% to 12% and adjusted earnings per share growth at the low end of 15% to 20%.