The cold business at Starbucks is hotter than ever as sales of unheated drinks reached 75% of U.S. beverage sales during the chain’s third quarter, which ended with same-store sales growing by 10%, missing Wall Street estimates by 1%.
“As the leader in premium coffee, we are particularly encouraged to see cold espresso beverages were up 13% year over year,” CEO Laxman Narasimhan said during Tuesday’s investor call. ” Easier-to-use portable handheld cold foam blenders continue to have an outsized impact for both the partner and customer experience.”
The blenders are in all U.S. company-operated stores and are meeting the summer’s demand for Starbucks Refreshers’ frozen beverages, which have seen double-digit growth this past quarter in every daypart. The blenders also support the growth of cold foam, the fastest-growing customization at Starbucks.
“Modifiers, such as cold foam, now contribute to over $1 billion in revenue annually,” Narasimhan said.
Q3 fiscal 2023 highlights:
- Global comparable store sales increased 10%, primarily driven by a 5% increase in comparable transactions and a 4% increase in average ticket.
- North America and U.S. comparable store sales increased 7%, driven by a 6% increase in average ticket and a 1% increase in comparable transactions.
- International comparable store sales increased 24%, driven by a 21% increase in comparable transactions and a 2% increase in average ticket; China comparable store sales increased 46%, driven by a 48% increase in comparable transactions and a 1% decline in average ticket
- Opened 588 stores, crossing the 37,000 store count threshold globally, ending the period with 37,222 stores: 51% company-operated and 49% licensed
- Stores in the U.S. and China comprised 61% of the company’s global portfolio, with 16,144 and 6,480 stores in the U.S. and China, respectively
- Consolidated net revenues of $9.2 billion, up 12% from the prior year, or 14%, inclusive of more than 1% unfavorable impact from foreign currency translation
“Our strong third-quarter results point to all-around momentum in the business, and reflect the significant progress we are making against our Reinvention Plan,” Narasimhan said in a company press release. “Our results were also amplified by the distinctive competitive advantages that set us apart in the market.”
Cherryh Cansler is VP of Editorial for Networld Media Group and senior editor of FastCasual.com. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others.