Starbucks Corporation ($SBUX) reported their Q1 FY 2021 earnings today. Global comparable store sales declined by 5%, which is not terrible considering the globe is still managing how to deal with the coronavirus. The sales decline was partially offset by at 17% increase in the average ticket. An increase in the average ticket would be good news in a normal climate. Clearly, Starbucks is impacted by the spending habits of consumers. However, the loyalty of many consumers to the Starbucks brand supported the tough environment with revenues for the quarter coming in at $4.7B vs. $5B last year.
The company added 278 net new stores, reflecting 4% growth in YOY stores. Quite surprising that a company like Starbucks is continuing to add stores when you already see them at every corner.
In terms of stores, between US & China, both countries are 61% of the total 32,938 stores. The US still has the most impact to the revenue with 15,340 stores vs China 4,863. For the fiscal 2021 year, the company intends to add a net 1,100 new stores. Only net 50 in the Americas, but 1,050 internationally.
Starbucks Financials Continued
The COVID19 pandemic impacted both the net revenues and GAAP operating margins. Reduced customer traffic, reduced store hours, and temporary closures were a few of the primary reasons.
Despite the GAAP earnings being down from the previous quarter to $0.53/share, this is a solid quarter. Many businesses have been absolutely struggling, but there is something that draws consumers to Starbucks coffee. The cup, the experience, the brand, all supported continued loyalty through the pandemic.
“Our results demonstrate the continued strength and relevance of our brand, the effectiveness of the actions we’ve taken to adapt to changes in consumer behavior and the steadfast commitment of our green apron partners to serve our customers and communities. We remain optimistic about our robust operating outlook for fiscal 2021 as well as our ability to unlock the full potential of Starbucks to create value for our stakeholders,”Kevin Johnson, President and CEO.
In terms of the 2021 FY guidance, Starbucks is still projecting growth above 18% for the globe operations. Impressive. With the US money printing machine (US Government) working overtime, the consumer may continue to fuel Starbucks sales growth. SBUX is another company to look at adding into your portfolio in 2021.
PS> Something that goes perfect with your Starbucks Coffee K-cups below is the Ember Mug²!