Starbucks beats earnings bolstered by cold beverage sales in the U.S.

Starbucks Corp on Tuesday reported better-than-expected earnings bolstered by robust performance in the U.S. and raised full-year earnings per share outlook.

The company warned of a slower recovery in China, its second-largest market, lowering its full-year forecast for the country’s same-store sales growth.

Starbucks fell 3.2% in the extended trading after hitting a 52-week high before the markets closed.

The coffee giant reported a net profit of $1.15 billion, up from a net loss of $678.4 million, earning 97 cents per share in the third quarter of 2021. Analysts’ were expecting a profit of 77 cents per share.

Quarterly revenue rose 78% to $7.5 billion, beating Wall Street’s expectations of $7.29 billion.

Starbucks reported that its global same-store sales surged 73%, compared to last year when its sales dropped 40% due to lockdown restrictions in several places due to the COVID-19 pandemic.

In the coffee chain’s largest market, the U.S., same-store sales rose 83%. However, Starbucks said nearly three-quarters of the drink sales came from cold beverages.

Outside of the U.S., the same-store sales climbed 41%, bolstered by 55% growth in customer traffic.

China reported same-store sales growth of 19%. A year ago, the country’s same-store sales fell 19%.

For the full-year forecast, the company raised its earnings per share outlook to a range of $2.97 to $3.02, up from its prior range of $2.65 to $2.75. The fiscal year includes a 53rd week this year, which is expected to add 10 cents to the company’s earnings per share.

It also narrowed the full-year outlook for global same-store sales growth to be in the range of 20% to 21%, compared with a prior range of 18% to 23%.

In the U.S., Starbucks now expects sales growth of 21% to 22% for cafes open at least 13 months, from a prior range of 17% to 22%.

However, in China, it predicts slowing same-store sales, forecasting a growth of 18% to 20%, compared to a growth of 27% to 32%.

Picture Credit: Starbucks