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Starbucks Sees Strong Comparable-Store Sales Growth Again

By Daniel Sparks - Updated Jan 29, 2020 at 10:07AM

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The coffee giant fired on all cylinders in fiscal Q1. But uncertainty lingers in China.

Following a fiscal year in which comparable-store sales growth accelerated, Starbucks (SBUX 0.07%) kicked off fiscal 2020 with more strong momentum. Revenue grew nicely in fiscal Q1 as non-GAAP (adjusted) earnings per share beat analyst estimates. In addition, the company reported a comps growth rate for the period that was above management's guidance range for the fiscal year.

"Building on solid business momentum from fiscal 2019, Starbucks performed very well throughout the first quarter, including one of the strongest holiday seasons in the history of our company," CEO Kevin Johnson said in a press release. 

Here's a look at the coffee giant's latest numbers.

A woman using Starbucks' mobile loyalty program

The Starbucks Rewards app. Image source: Starbucks.

Starbucks' fiscal first-quarter results


Q1 Fiscal 2020

Q1 Fiscal 2019



$7.10 billion

$6.63 billion






Operating margin



90 basis points

Data source: Starbucks.

Starbucks' revenue rose 7% year over year to $7.1 billion -- about in line with analysts' average forecast for the metric. Non-GAAP earnings per share during the period increased 5%. Notably, however, non-GAAP earnings per share in the year-ago period benefited from a $0.07 one-time income tax benefit. Excluding this headwind from the year-over-year comparison, non-GAAP earnings per share for Q1 2020 would have increased 16% year over year.

Starbucks' operating margin during the period expanded 90 basis points year over year.

Multiple catalysts

Johnson noted in the company's earnings release that Starbucks benefited from "a healthy balance of comparable sales growth and new store development, as well as continued expansion of our Global Coffee Alliance with Nestle." Johnson also cited beverage innovation and continued improvement in digital customer relationships as key factors behind the quarter's solid performance.

Comps, or sales at company-operated stores open 13 months or longer, rose 5% year over year on a global basis, in line with growth seen in the fourth quarter of fiscal 2018. Global comps growth was driven by a 6% increase in the U.S. and 3% growth in China. Going into the year, management had guided for global comps to rise from 3% to 4% during fiscal 2020.

Starbucks opened 539 new stores during the period, bringing total stores to 31,795 -- up 6% year over year.

Also helping growth, the consumer goods company's digital rewards members in the U.S. increased 16% year over year to 18.9 million. This was an acceleration from 15% year-over-year growth in the number of U.S.-based Starbucks Rewards members in the fourth quarter of fiscal 2019.

Uncertainty in China

While the company maintained its full-year financial outlook, it said that it is excluding any impact the coronavirus outbreak in China may have on results.

"Currently, we have closed more than half of our stores in China and continue to monitor and modify the operating hours of all of our stores in the market in response to the outbreak of the coronavirus," management said in the fiscal first-quarter earnings release.

Furthermore, the company said that while it expects the negative impact from the virus to be temporary, it is forecasting for both its international segment and consolidated results to be materially affected in fiscal Q2 and the full fiscal year.

"The company will update its guidance for fiscal 2020 when we can reasonably estimate the impact of the coronavirus," management added.

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