Starbucks shoppers spending more

NEW YORK — Starbucks says its profit rose 34 percent in the quarter, as the coffee chain used its loyalty program to get customers to visit more often and spend more on revamped sandwiches and other food.

The Seattle-based company said global sales rose 7 percent at cafes open at least a year, including an 8 percent rise in both the U.S. and Asia. In the region encompassing Europe, the Middle East and Africa, where the company has struggled, the figure rose 2 percent.

The sales performance is somewhat of a standout in the restaurant industry. Chains including McDonald’s and Burger King have blamed the weak economy as they fight to drive up sales. But others are faring relatively better, with Chipotle reporting a 6.2 percent sales increase at stores open at least a year and Dunkin’ Donuts reporting a 4.2 percent increase for the latest quarter.

Starbucks Corp. has managed to keep growing through a mix of measures. It’s adding items such as Evolution juices, which can cost as much as $6 a bottle, and has rolled out new sandwiches and salads to get people to spend more when they stop in for a drink. Prices on several beverages were also increased over the summer.

Troy Alstead, Starbucks’ chief financial officer, said the increase in the average receipt for the quarter was mostly because of food. “As they’re adding those purchases, that’s giving us a lift,” he said.

Still, Alstead said only about a third of purchases overall include food. But he said the trends are improving, and should continue to do so as the company finishes the rollout of new La Boulange baked goods.

For the quarter, Starbucks said it earned $481.1 million, or 63 cents per share. Analysts expected 59 cents per share. A year ago, the company earned $359 million, or 46 cents per share.

Revenue rose to $3.8 billion, but was short of the $3.81 billion analysts expected, and its stock fell 2 percent to $79.20. Over the past year, the stock is up more than 73 percent.

Starbucks also said Wednesday that it expects revenue growth of “10 percent or greater” for 2014, which Alstead said represented “zero change” in the company’s expectations. In the previous quarter, Starbucks had specified a forecast of 10 percent to 13 percent growth.

The company also raised its dividend by 24 percent to 26 cents per share.

Starbucks has about 20,000 locations around the world, with about 12,000 of those in the U.S.

More in Herald Business Journal

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence said to be in talks for merger with Ascension

The two Catholic health organizations have been exploring joining forces, sources say.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

Lockheed-Martin dominates global arms sales, Boeing is 2nd

The combined sales of U.S.-based companies totaled $217 billion.

The Marine Corps’ version of the F-35 Joint Strike Fighter is designed to land vertically like a helicopter. (Lockheed Martin)
F-35 fighter costs, $1 trillion over 60 years, draw scrutiny

Pentagon’s ability to repair F-35 parts at military depots is six years behind schedule.

Most Read