Starbucks Corp. shares rose as a strong U.S. performance and higher prices helped to offset lower traffic and sluggishness in China, where COVID-19 measures have sharply suppressed demand.
The results reinforce the message found in recent reports from McDonald’s and Chipotle Mexican Grill: Americans are still opening up their wallets to eat out – even if inflation is starting to erode purchasing power.
Sales of $8.15 billion came in slightly above expectations in the fiscal third quarter ended July 3, Starbucks said Tuesday in a statement.
The average ticket – or cost per order – rose 6%, but comparable transactions fell 3%. This shows that higher prices are making up for a lower volume of sales.
Starbucks stock rose 1.1% at 9:36 a.m. in New York trading on Wednesday.
The results “demonstrate the early progress we have made in just four short months,” founder and interim Chief Executive Officer Howard Schultz said.
Since taking over in April, Schultz has shaken up management, halted share buybacks and attempted to blunt a growing union drive in the U.S..
On a call with analysts, Schultz said Starbucks has a “reinvention plan” that will affect “every aspect” of the business. Details are expected during the company’s investor day on Sept. 13.
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