There was no shortage of doubts about Starbucks (NASDAQ:SBUX) going into its fiscal fourth-quarter and full-year financial report. After several quarters of disappointments, investors weren't sure the company could make good on its plan to deliver an increase in comparable-store sales. Shareholders let out a collective cheer when Starbucks reported comps that were actually better than expected.

For the fourth quarter, Starbucks reported record net revenue -- for the second time in as many quarters -- of $6.3 billion, up 11% year over year and edging out analysts' consensus estimates of $6.28 billion. Adjusting for unfavorable foreign currency translation and the company's ongoing reorganization, net revenue grew 9% year over year. Adjusted earnings per share of $0.62 expanded 13% year over year, also ahead of expectations of $0.60.

A man looking at a ledger reaching for a Starbucks cup.

Image source: Starbucks.

A comps surprise

Metric

Q4 2018

Q4 2017

Change (YOY)

Revenue

$6.30 billion

$5.70 billion

11%

Operating income

$957 million

$1.02 billion

(6%)

Earnings per share

$0.56

$0.54

4%

Data source: Starbucks Fourth-Quarter Financial Release. YOY = year over year.

The biggest revelation of the quarter was that global comparable-store sales appeared to be back on track, up 3% year over year, after ticking up just 1% last quarter. Starbucks said the improvement was driven by a 4% increase in the average ticket, with 4% comps growth in the Americas and U.S. segment. Starbucks has been pinning much of its recovery on a massive build-out in China, so it was important to learn that comps in the Middle Kingdom were also better, up 1% year over year, a significant improvement over the 2% decline in the third quarter.

There were other signs of improvement. Members of the Starbucks Rewards loyalty program grew to 15.3 million active members in the U.S., up 15% year over year, while Mobile Order and Pay expanded to represent 14% of transactions at company-operated stores in the U.S. Starbucks opened 604 net new stores during the fourth quarter, bringing its year-end total to 29,324 stores across 78 markets.

The company also made progress on its capital return program, having pledged to return $25 billion to shareholders via share buybacks and dividends through fiscal year 2020. Starbucks reported that it returned $3.6 billion during the quarter, and for fiscal 2018, total shareholder returns climbed to $8.9 billion.

"Starbucks record Q4 performance reflected meaningful improvement in virtually every critical operating metric compared to Q3," said CEO Kevin Johnson. "As we enter fiscal 2019, we are executing against a clear growth agenda, with a focus on our long-term growth markets of the U.S. and China."

What the future holds

For the 2019 fiscal year (which began on Oct. 1), Starbucks expects to achieve global comparable-store sales expansion near the low end of its 3% to 5% targets. The company is forecasting revenue growth in a range of 5% to 7% year over year, including a 2% net negative impact from its continuing reorganization. Starbucks anticipates earnings per share in a range of $2.32 to $2.37, and adjusted earnings per share of between $2.61 and $2.66.

To break that down into quarterly sized bites -- and while I don't put much stock in Wall Street's short-term mindset -- analysts' consensus estimates are calling for revenue of $6.5 billion for the fiscal first quarter, which would hit the high end of management's growth estimates, and adjusted earnings per share of $0.66. 

Considering how comps declined for several successive quarters, the return to comparable-store sales improvement was a welcome surprise for investors, and they celebrated by bidding up the shares more than 9% in the trading session following the earnings release. While challenges remain, this is a good first step toward reassuring shareholders that there's more growth in store for Starbucks.

Danny Vena owns shares of Starbucks. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.