It was a happy holiday at Starbucks, but the company's sales momentum could start to slow due to the coronavirus outbreak in China.
New drinks like the Pumpkin Cream Cold Brew were a hit with customers, helping the Seattle-based coffee giant beat Wall Street's forecasts in the October-December period. Starbucks reaffirmed its 2020 profit guidance for now, but said it has already closed more than half of its stores in China.
Starbucks reported Tuesday that its earnings rose 16% to $886 million in its fiscal first quarter. Earnings, adjusted for non-recurring items like restructuring charges, were 79 cents per share. That beat Wall Street's forecast of 76 cents.
Starbucks said same-store sales — or sales at stores open at least 13 months — jumped 5% worldwide in the October-December period, ahead of analysts' forecast of 4.4%. Revenue was up 7% to $7.1 billion, in line with analysts' forecasts.
Starbucks said 1.4 million U.S. customers joined its Starbucks Rewards loyalty program during the quarter. The company said demand for mobile ordering and payment is growing in the U.S.
The continued resilience of the U.S. economy could require further interest rate increases, Federal Reserve Chair Jerome Powell said Friday in a closely watched speech that also highlighted the uncertain nature of the economic outlook.
As the Federal Reserve prepares to hold its annual economic conference in Jackson Hole on Friday and Saturday, its policymakers are trying to guide the U.S. economy toward something akin to what's happening in Jackson Hole.
Anyone in the U.S. who had an account at any time between May 24, 2007, and December 22, 2022, is eligible to receive a payment. The 2022 settlement resolves a lawsuit alleging that Facebook allowed millions of its users’ personal information to be fed to Cambridge Analytica, a firm that supported Donald Trump’s 2016 presidential campaign.
