WASHINGTON: Starbucks raised its annual forecasts as chief executive officer Brian Niccol says investments in faster service and more staffing had lured customers back to the global coffee chain.
The company’s shares jumped about 5% in extended trading on Tuesday after it also beat expectations for second-quarter (2Q) sales growth and profit. “The shine is back on Starbucks around the world,” Niccol said on the earnings call Tuesday.
Niccol’s turnaround strategy, called “Back to Starbucks”, has focused on improving metrics like wait times and reported customer satisfaction, and has paired those goals with investments in additional staffing.
The investments in labour are why despite increased sales, operating margins in the company’s core North American market declined to 9.9% from 11.6% last year.
The world’s largest coffee chain reported a 6.2% increase in global same-store sales for the 2Q, above analysts’ expectations of a 3.7% rise, according to data compiled by LSEG. — Bloomberg
