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Monday, March 18, 2024
March 18, 2024

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Food sales help boost profits for Starbucks

The Columbian
Published:

NEW YORK — Starbucks said its quarterly profit jumped 16 percent as its U.S. cafes attracted more visits and sold more food, including breakfast sandwiches.

The coffee chain said sales rose 7 percent at established locations globally, including in its flagship U.S. market, where it has more than 12,100 locations.

Scott Maw, chief financial officer for Starbucks, said in a phone interview that the increase in the U.S. was driven primarily by higher average spending per visit. That was partly the result of the Seattle-based chain revamping its baked goods with new recipes and higher prices, and convincing customers to buy more food in general.

Overall food sales in the U.S. were up 16 percent from a year ago, Maw said, while breakfast sandwich sales were up 35 percent.

Starbucks said a 2 percent rise in customer visits in the U.S. also helped bring in more sales. The increase translated into an additional 10 million visits during its second fiscal quarter.

A key part of Starbucks strategy for continuing to drive up sales is its expansion into the afternoons and evenings, when its stores tend to be less busy. The push has included offering more sandwiches and boxed meals that might attract people looking for a quick lunch. Already, Starbucks says about a third of orders include a food item and that the figure has been ticking higher.

The company is also testing a program in about 30 cafes where it sells alcohol in its cafes in the evenings, and has said plans to expand that more broadly this year.

During the quarter, the Asia region saw a 12 percent growth in sales at established locations, while the unit encompassing Europe, the Middle East and Africa rose 2 percent.

For the quarter ended March 29, Starbucks earned $494.9 million, or 33 cents per share, which was in line with expectations. A year ago, it earned $427 million, or 28 cents per share.

Revenue rose 18 percent to $4.56 billion, more than the $4.53 billion Wall Street expected.

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