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Monday, March 18, 2024
March 18, 2024

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Starbucks’ menu extras help drive record sales

More food, novel drinks assist with more traffic, buying

The Columbian
Published:

Starbucks’ growing ability to draw people into the store for things other than a coffee run brought in record quarterly revenues and higher-than-expected profits.

The coffee giant said that in the U.S., sales for stores that were open a year ago grew 6 percent, although the frequency of transactions in those stores only increased by 2 percent.

The majority of the bump came from people buying La Boulange bakery items, breakfast and lunch sandwiches, as well as novel drinks such as Teavana iced tea, said chief operating officer Troy Alstead in an interview.

The strongest growth in customer visits took place in the middle of the day and in the afternoon, a sign that Starbucks is fulfilling its long-standing goal of squeezing more revenue out of its existing footprint.

“We’re increasingly seeing more traffic and more spending,” Alstead said.

Booming sales in the U.S. and other markets, including Asia, led Starbucks to post profits of $0.67 per share, above Wall Street expectations and its own guidance, and 22 percent above the same period last year.

Revenues topped $4.15 billion, up 11 percent and a record for the company.

The results led the company to change its 2014 per-share earnings guidance from a range of $2.62 to $2.68 to a range of $2.65 to $2.67, a figure that excludes a five cent per share benefit from one-time transactions.

Starbucks also projected an encore performance for 2015, with revenue growth of 10 percent or more and 15 to 20 percent of earnings per share growth.

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