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Starbucks reports global same-store sales down 5% in 1Q 2021, EPS of $0.61 vs $0.55 expected

Starbucks Kevin Johnson
Starbucks President and Chief executive officer Kevin Johnson

MILAN — Starbucks posted mixed results for 13-week fiscal first quarter ended December 27, 2020. The U.S. coffee giant reported net income of $622.2 million, or 61 cents a share, compared with net income of $885.7 million, or 74 cents a share, in the year-ago quarter. Revenue declined 5% to $6.75 billion from $7.1 billion a year ago. Analysts surveyed by FactSet had expected earnings of 55 cents a share on sales of $6.91 billion. Global same-store sales fell 5% in the first quarter, more than analysts’ estimates of a 3.4% decline, according to Refinitiv IBES data.

Comparable sales declined 6% for the Americas region, compared with a 5.2 per cent fall expected by analysts.

But in China, Starbucks’ biggest growth market, comparable sales rose 5 per cent as the company benefited from the popularity of its rewards program and the return of pre-coronavirus consumer habits.

For the second quarter, Starbucks said it expects US comparable sales to rise between 5 per cent and 10 per cent, while in China they were forecast to grow nearly two-fold a year after the pandemic hit the region.

Starbucks’ recovery slowed at the end of last year as U.S. coronavirus cases mounted, but the company says it’s confident its U.S. business will fully recover by March.

“I am optimistic, because this year holds tremendous promise for healing,” Starbucks president and ceo Kevin Johnson said in a conference call with analysts Tuesday.

“I am very pleased with our start to fiscal 2021, with meaningful, sequential improvements in quarterly financial results despite ongoing business disruption from the pandemic. Investments in our partners, beverage innovation and digital customer relationships continued to fuel our recovery and position Starbucks for long-term, sustainable growth.”

“Our results demonstrate the continued strength and relevance of our brand, the effectiveness of the actions we’ve taken to adapt to changes in consumer behavior and the steadfast commitment of our green apron partners to serve our customers and communities. We remain optimistic about our robust operating outlook for fiscal 2021 as well as our ability to unlock the full potential of Starbucks to create value for our stakeholders,” concluded Johnson.

Starbucks – Q1 Fiscal 2021 Highlights

  • Global comparable store sales declined 5%, driven by a 19% decrease in comparable transactions, partially offset by a 17% increase in average ticket
    • Americas comparable store sales declined 6%, driven by a 21% decrease in comparable transactions, partially offset by a 20% increase in average ticket; U.S. comparable store sales declined 5%, driven by a 21% decrease in comparable transactions, partially offset by a 19% increase in average ticket
    • International comparable store sales were down 3%, driven by a 10% decline in comparable transactions, partially offset by an 8% increase in average ticket; China comparable store sales were up 5%, driven by a 9% increase in average ticket, partially offset by a 3% decline in transactions; International and China comparable store sales are inclusive of a benefit from value-added tax exemptions of approximately 3% and 5%, respectively
  • The company opened 278 net new stores in the first quarter of fiscal 2021, yielding 4% year-over-year unit growth, ending the period with 32,938 stores globally, of which 51% and 49% were company-operated and licensed, respectively
    • Stores in the U.S. and China comprised 61% of the company’s global portfolio at the end of the first quarter of fiscal 2021, with 15,340 and 4,863 stores, respectively
  • Consolidated net revenues of $6.7 billion declined 5% from the prior year primarily due to the impact of the COVID-19 pandemic
    • Impact included the effects of reduced customer traffic, modified operations, reduced store operating hours and temporary store closures
  • GAAP operating margin of 13.5%, down from 17.2% in the prior year primarily due to the COVID-19 pandemic, mainly sales deleverage, as well as growth in wages and benefits and Americas store portfolio optimization expenses, partially offset by labor efficiency and the impact of pricing in the Americas
    • Non-GAAP operating margin of 15.5%, down from 18.2% in the prior year
  • GAAP earnings per share of $0.53, down from $0.74 in the prior year primarily due to unfavorable impacts related to the COVID-19 pandemic
    • Non-GAAP earnings per share of $0.61, down from $0.79 in the prior year
  • Starbucks® Rewards loyalty program 90-day active members in the U.S. increased to 21.8 million, up 15% year-over-year