Pumpkin spice, iced drinks drive Starbucks Q4 salesFast Casual

“Pumpkin spiced and everything nice” could be the mantra for Starbucks Corp.’s Q4 results, which beat analysts’ estimates of 72 cents per share, ending the quarter at 81 cents per share. Revenue was $8.41 billion versus $8.31 billion expected, and net sales for the period rose 3.3% to $8.41 billion.

The chain can thank U.S. customers buying iced coffee and pumpkin spice drinks for the surge.

“The (pumpkin spice platform) grew 17% year-over-year and continues to resonate with customers who love the classic Pumpkin Spice Latte, as well as newer additions, such as the Pumpkin Cream Cold Foam modifier, North American President Sara Trilling said during Thursday’s earnings call. “Second, our cold customized beverage strategy is working. We’re seeing growth in both hot and cold and increasing customization.”

Cold coffee beverages accounted for nearly 80% of total beverage sales in U.S company-operated stores, Howard Schultz, interim chief executive officer, said during the call.

“And customers are increasingly further customizing their cold coffee beverages by adding high-margin beverage flavor modifiers to create unique beverages tailored to their own particular taste preferences,” according to Schultz, who said the chain was rolling out a proprietary, handheld cold foamer that enhances beverage quality and increases speed of service.

Starbucks’ convenience channels, such as drive-through, mobile-order-and-pay and delivery, drove 72% of the chain’s total sales volume, and Starbucks Rewards members drove a record 55% of tender in the U.S. company-owned stores with membership climbing 16% to hit 28.7 million people.

“Starbucks Rewards continues to deliver value to our customers, enable customer connection and drive our business,” Schultz said. “And despite its global scale and growth, we have significant untapped opportunities to grow our Rewards program in a very unique way. We recently launched our Reward Together program, enabling a select group of leading brands to partner with us by linking their loyalty program to Starbucks Rewards.”

Q4 Highlights

• Global comparable store sales increased 7%, primarily driven by an 8% increase in average ticket.
• North America and U.S. comparable store sales increased 11%, driven by a 10% increase in average ticket and a 1% increase in comparable transactions.
• International comparable store sales decreased 5%, driven by a 5% decline in comparable transactions and a 1% decline in average ticket.
• China comparable store sales decreased 16%, driven by a 17% decline in comparable transactions, partially offset by a 1% increase in average ticket.
• Opened 763 new stores, ending the period with 35,711 stores globally.
• Starbucks Rewards loyalty program 90-day active members in the U.S. increased to 28.7 million, up 16% year-over-year.