After four straight quarters of pandemic-fueled sales declines, Starbucks is returning to growth.
The Seattle-based coffee giant said Tuesday its sales rose 11% to $6.7 billion in the January-March period. That was just shy of Wall Street’s forecast revenue of $6.78 billion, according to analysts polled by FactSet.
Starbucks President and CEO Kevin Johnson said U.S. growth, in particular, surpassed expectations in the company's fiscal second quarter. Johnson said U.S. sales grew at both urban and suburban locations __ and at all times of the day __ as vaccinations progressed.
“Customers crave human connection," Johnson said during a conference call with investors. “Certainly not all markets are moving at the same speed in terms of vaccine distribution, but we know that this is the key that enables all of us to once again be together.”
U.S. same-store sales — or sales at stores open at least a year — rose 9%, compared to a 3% decline in the same period last year. While store traffic fell 10% from a year ago, customers spent more, growing the average ticket by 21%, Starbucks said.
That has been a trend throughout the pandemic as customers’ usual patterns were disrupted. Starbucks has been seeing fewer morning commuters grabbing a single coffee, but larger orders including snacks and frothy drinks when families and others visit drive-thrus later in the day.
New products are also driving customer interest. Johnson said sales of the plant-based Impossible breakfast sandwich, which was introduced last summer, hit a record high in the January-March period, while sales of alternative dairy drinks __ like a cold brew made with almond milk __ rose 53%.
Johnson said Starbucks' plan to close around 400 U.S. stores is about 70% complete. The company is closing underperforming locations and replacing them, in some cases, with smaller pickup stores or stores with drive-thru windows.