Starbucks Corporation (NASDAQ:SBUX) reportedly topped prediction for earnings and revenue in the latest quarter however it fell short of the U.S. sales targets for the fourth successive period, as the coffee giant interestingly highlighted that presidential election is weighing on consumer spending.
Starbucks Chief Executive Howard Schultz said on Thursday that a “high degree of uncertainty” around next week’s election is a stumbling block for the company at the moment to meet its target.
“Everyone is hoping post-election there will be a return to a natural state of affairs in terms of consumer behavior,” Mr. Schultz told investors.
Starbucks same-store sales in the 3 month period ending on Oct 2 surged 4%, in contrast with analysts’ prediction of a 4.8% increase. Mr. Schultz advised everyone to consider Starbucks’s long-term policy rather than quarterly sales fluxes.
Results showed that more customers in the U.S. are using the chain’s mobile app to order and pay for their drinks and are joining the company’s rewards program. Its Membership has surged 18% year over year. Mobile payments represent 25% of U.S. transactions, up from 20% year over year.
Company’s COO Kevin Johnson said Starbucks needs to make a splash heading into its sustaining holiday season, when the company sells a great deal of gift cards and merchandise.
He added that the presidential election is “generating a lot of noise, all retailers, us included, will have to work harder to break through that noise.”
Meanwhile results in the most populated country on earth was very encouraging in the quarter, generating 6% same-store sales growth. Starbucks announced to more than double its store numbers in China to 5,000 by 2021. “We are doubling down on China,” Mr. Schultz said.
The world’s largest coffee maker last quarter profit surged 23% to $801 million, or 54 cents a share. Exclusive of certain items, company’s profit go up 56 cents a share from 43 cents a share year over year that was better than company’s outlook. Its revenue jumped 16% to $5.71 billion, more the $5.68 billion predicted by analysts surveyed by Thomson Reuters.