Starbucks tops sales estimates as holiday favourites lure customers

Starbucks Corp exceeded Wall Street forecasts for quarterly sales and earnings, helped by aggressive promotions and the popularity of holiday-themed beverages, driving shares 4 percent higher on Thursday.

Globally, Starbucks` same-restaurant sales rose 4 percent during the final three months of 2018, topping analysts` average estimate of a 2.8 percent increase, according to IBES data from Refinitiv.

Its promotions included holiday favourites such as Peppermint Mochas and Gingerbread lattes, while its Draft Nitro cold brew, which aims to creates a beer-like experience, has been pulling in customers during slow afternoons.

The company has also teamed up with food-delivery services in China to help boost sales as it faces rising competition from local upstarts.

"Overall, we believe it was a solid quarter and this is another quarter that reinforces our view that the turnaround is showing progress and gaining some steam," Edward Jones analyst Brian Yarbrough said.

Sales from Starbucks` Americas and U.S. business reached a record $4.6 billion in the three months ended Dec. 30, while sales from China, its second biggest market, trumped estimates.

For a graphic on Starbucks` sales growth in China, click here: https://tmsnrt.rs/2HxDTzW

Total net revenue climbed 9.2 percent to $6.63 billion, beating analysts` forecasts of $6.49 billion.

Quarterly net earnings attributable to Starbucks fell to $760.6 million from $2.25 billion a year earlier, reflecting nearly $1.8 billion in gains last year from acquisitions and the sale of some businesses.

Excluding one-time items, the company earned 68 cents per share, beating estimates by 3 cents.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)