MILAN – Starbucks reported fiscal second-quarter earnings results for 13-week ended March 28, 2021, after the closing bell on Tuesday. Global same-store sales rebounded 15%, the best performance since the beginning of the pandemic. The average ticket increased 19%, while comparable transactions slipped 4%. Americas comparable store sales increase of 9% vs. +7.4% consensus. International comparable store sales increase of 35% vs. +47.8% consensus. China comparable store sales increased a whopping 91%.
Net revenues rose 11 per cent to $6.7bn, missing Wall Street’s estimate of $6.8bn. However, Starbucks earned 62 cents per share on an adjusted basis, or nine cents more than analysts expected. Net earnings doubled to $659m from $328m.
The coffee giant raised its fiscal 2021 guidance for revenue and profit, sending an upbeat signal on the pace of its recovery as consumers return to the company’s coffee shops with vaccinations on the rise.
The company now expects 2021 revenue to be between $28.5 billion and $29.3 billion, up from its prior projection of $28 billion and $29 billion. It expects adjusted earnings per share between $2.90 and $3, compared with $2.70 and $2.90.
“I am very pleased with our progress to date in fiscal 2021, as our second quarter results demonstrated impressive momentum in the business with full sales recovery in the U.S. Our strong results validate our ability to adapt to changes in our environment and the needs of our customers,” said Kevin Johnson, president and ceo.
“We have positioned Starbucks for the inevitable great human reconnection that we see unfolding in the U.S. and will propagate in every market around the world, where people once again connect with others face-to-face to heal, to belong, to reflect, to share and to celebrate. Starbucks was built for this moment, and as we celebrate our 50th anniversary, we remain confident in our ability to execute our ‘Growth at Scale’ agenda and unlock the full potential of the Starbucks brand,” concluded Johnson.
Starbucks Q2 Fiscal 2021 Highlights
- Global comparable store sales increased 15%, driven by a 19% increase in average ticket, partially offset by a 4% decline in comparable transactions
- Americas comparable store sales increased 9%, driven by a 22% increase in average ticket, partially offset by a 10% decline in comparable transactions; U.S. comparable store sales increased 9%, driven by a 21% increase in average ticket, partially offset by a 10% decline in comparable transactions
- International comparable store sales increased 35%, driven by a 26% increase in comparable transactions and a 7% increase in average ticket; China comparable store sales increased 91%, driven by a 93% increase in transactions, slightly offset by a 1% decline in average ticket; International and China comparable store sales are inclusive of a benefit from value-added tax exemptions in China reinstated as of January 1, 2021, of approximately 4% and 9%, respectively
- The company opened 5 net new stores in the second quarter of fiscal 2021, yielding 3% year-over-year unit growth, ending the period with 32,943 stores globally, of which 51% and 49% were company-operated and licensed, respectively
- Net new store openings reflect the impact of approximately 300 U.S. and Canada company-operated store closures in relation to the acceleration of the Americas Trade Area Transformation initiative announced last June, which is part of our ongoing strategy to strengthen and optimize our portfolio
- Stores in the U.S. and China comprised 62% of the company’s global portfolio at the end of the second quarter of fiscal 2021, with 15,288 and 4,973 stores, respectively
- Consolidated net revenues of $6.7 billion increased 11% from the prior year, mainly driven by a 15% growth in comparable store sales primarily from lapping the unfavorable impact of business disruption in the prior year due to the COVID-19 pandemic and strength in U.S. company-operated sales in the current year, partially offset by the unfavorable impact of Global Coffee Alliance transition-related activities
- GAAP operating margin of 14.8% increased from 8.1% in the prior year primarily driven by sales leverage from business recovery and the lapping of COVID-19 related costs in the prior year, partially offset by growth and investments in wages and benefits for store partners
- Non-GAAP operating margin of 16.1%, up from 9.2% in the prior year
- GAAP earnings per share of $0.56, up from $0.28 in the prior year
- Non-GAAP earnings per share of $0.62, up from $0.32 in the prior year
- Starbucks Rewards loyalty program 90-day active members in the U.S. increased to 22.9 million, up 18% year-over-year
Company Updates
In January, the company announced its commitment to invest $100 million by 2025 to create the Starbucks Community Resilience Fund. The fund focuses on advancing racial equity and environmental resilience by supporting small business growth and community development projects in Black, Indigenous and People of Color neighborhoods with historically limited access to capital.
As a progression towards environmental goals previously announced in 2020, in March, the company announced its commitment to achieving carbon neutral green coffee and conserve water usage in green coffee processing by 50% by 2030.
In March, the company celebrated its 50th anniversary during its Annual Meeting of Shareholders. During the virtual meeting, senior leadership and partners from around the world gathered to reflect on the company’s history and celebrate the remarkable story of Starbucks.
In March, the company published its third edition of an objective assessment of its work on civil rights, called the Civil Rights Assessment. This evaluation conducted by Covington & Burling LLP under the leadership of former U.S. Attorney General Eric Holder, Jr. addresses the company’s progress over time. It also provides recommendations for improvements to advancing inclusion, diversity and equity on behalf of our partners, customers and communities.
The Board of Directors declared a cash dividend of $0.45 per share, payable on May 28, 2021, to shareholders of record as of May 13, 2021.
