Starbucks Corp (SBUX.O) beat quarterly sales estimates on Wednesday, as the world’s largest coffee chain’s loyalty program and new delivery options boosted demand and helped fend off competition, especially in the United States and China, reports Trend citing to Reuters.
Shares rose 3% in extended trading after the Seattle-based company also forecast 2020 comparable restaurant sales largely above estimates.
Starbucks has beefed up its “Rewards” program with perks including access to Happy Hours events and the ability to skip lines with a mobile payment option as it battles rising competition from niche independent coffee shops in the United States, as well as startups such as Luckin Coffee LK.N in China.
The program’s active U.S. membership jumped 15% to 17.6 million in the fourth quarter, and sales at locations open for at least 13 months rose 5% in the fourth quarter ended Sept. 29, beating analysts’ average forecast of 3.95%, according to IBES data from Refinitiv.
Total net revenue rose 7% to $6.75 billion, beating the average analyst estimate of $6.68 billion.
Net earnings attributable to the company rose to $802.9 million, or 67 cents per share, from $755.8 million, or 56 cents per share, a year earlier.
Excluding one-time items, the company earned 70 cents per share, matching Wall Street estimates.
Starbucks estimated fiscal 2020 global comparable restaurant sales would rise 3% to 4%, while analysts had expected a 3.3% increase.
About this time last year, the coffee giant had just announced an organizational restructuring with corporate job losses and leadership changes.
“We are making meaningful progress against our strategic priorities while streamlining the company,” Chief Executive Kevin Johnson said in a statement.
Starbucks plans to open its largest store next month in Chicago, calling it a “Reserve Roastery,” with about 35,000 feet of retail space across five floors.