Starbucks Raises Full-Year Outlook

Shares of Starbucks (SBUX) hit a new record early on Friday as the firm lifted its sales and earnings forecasts for fiscal 2019 after revenue and net income comfortably beat guidance in the third quarter due in part to a global expansion of stores.

The group said in its earnings statement late on Thursday that revenue rose by 8.1% to $6.82 billion during the three months that ended June 30, from $6.31 billion a year ago, topping the $6.66 billion average analyst estimate compiled by Capital IQ. Nearly one-third of the 442 net new store openings in the quarter were in China, pushing up the total by 7% from a year earlier.

Starbucks also reported a 6% increase in its global comparable sales versus expectations for a 4% jump, with the US standing tall in terms of the average ticket size and transactions. Meanwhile, the Starbucks Rewards loyalty program grew in double digits to 17.2 million active members.

In line with the strong group turnover, adjusted earnings in the quarter surged by 25.8% to $0.78 per share, from $0.62 per share a year ago, handily beating the $0.73 market consensus.

“Our two targeted long-term growth markets, the US and China, performed extremely well across a number of measures,” CEO Kevin Johnson said in the statement. “Given the strong momentum across our business, we are raising our full-year financial outlook.”

For the full-year 2019, the company now expects global comparable sales growth of about 4%, versus previous estimates of 3% to 4% and the Street’s forecast of 3.5%. Adjusted earnings are now seen at $2.80 to $2.82 per share, up from prior guidance of $2.75 to $2.79 per share and in line with the $2.80 per share market outlook for 2019.

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