Starbucks’ sales climbed to record levels in its fiscal second quarter, but its profits took a hit from climbing labor and ingredient costs
Starbucks’ sales climbed to record levels in its fiscal second quarter, but its profits took a hit from climbing labor and ingredient costs.
The Seattle coffee company —— which welcomed back former CEO Howard Schultz last month as its interim leader —— said revenue rose 15% to a record $7.6 billion in its 13-week quarter, which ended April 3. That was in line with Wall Street’s estimates, according to analysts polled by FactSet.
But net earnings rose just 2% to $674 million. Starbucks’ adjusted earnings of 59 cents per share fell short of analysts’ forecast of 60 cents.
Starbucks announced a $1 billion investment in employee wages and benefits last fall, with a plan to lift US workers’ pay to at least $15 per hour by this summer. Schutz said Tuesday those increases will give the stores the workers they need to handle customer demand.
Starbucks said its same-store sales —— or sales at stores open at least a year —— rose 7% globally in the second quarter, surpassing Wall Street’s estimate of 6.5%. That was largely on the strength of the business in North America; international same-store sales fell 8% due to coronavirus restrictions in China.
Credit: abcnews.go.com /