Starbucks delivered better than expected second-quarter results on Thursday, thanks in part to a raft of new drinks, viral social-media campaigns and steady growth in China.

The Seattle-based coffee giant reported a quarterly profit of $663.2 million on revenues of $6.3 billion — up 0.5 percent and 5 percent, respectively, from the same quarter in 2018. The company’s earnings per share for the quarter jumped to 53 cents, up nearly 13 percent over last year.

“With solid first half financial results, we are on track to deliver on our full-year commitments.” Kevin Johnson, Starbucks CEO and president, said in statement Thursday.

Although Starbucks’ revenues were slightly below the $6.32 billion forecast by many analysts, according to the survey firm Refinitiv, the company beat the experts’ estimates for earnings per share.

Thursday’s results were released just after markets closed for the day and Starbucks shares briefly jumped by around 2%, to $78.85 before drifting back. Since the start of the year, Starbucks shares have risen 18.7%, compared with 16.8% for the S&P 500, and are up nearly 30% over a year ago.

Starbucks saw substantial growth across all operations. Globally, same-store sales jumped by 3 percent over last year, which was also slightly ahead of Wall Street forecasts. China was a big piece of that, with a 3 percent increase in same store sales, compared with 4 percent same-store growth in the U.S.

Chinese growth “is especially noteworthy when you consider the intensity of competition from discounting in China, as well as our aggressive pace of new store development,” Johnson said during a conference call with analysts Thursday afternoon.


The company added 319 stores worldwide during the second quarter, for a total 30,184 locations in 78 markets. Nearly 95 percent of those new stores were outside the United States. In China alone, the company added nearly 600 stores in the last 12 months.

Starbucks also bolstered the ranks of its rewards program. The company now has 16.8 million active members in the United States, up some 13% over last year — a key metric, given that members account for 41% of U.S. sales.

As important, Starbucks customers are spending more per transaction, including higher-end products, like the new Cloud Macchiato drink, which the company rolled out in March with a social-media blitz involving Ariana Grande. The results demonstrate “that our higher margin premium offerings resonated with customers,” CFO Pat Grismer said on Thursday’s call.

Starbucks also reported the repurchase of 37.4 million shares of its own common stock in the second quarter, for a total of 185 million shares over the last year. Those repurchases help explain why Starbucks’ earnings per share increased so much more than did underlying earnings: By repurchasing its own shares, a company reduces the overall number of shares in circulation, which increases the fraction of earnings that each circulating share represents.

There were some off notes. The company reported that transactions at Chinese stores open for at least a year fell by 1%. But deliveries, in China and elsewhere, are on the rise.


Overall, the results were strong enough that the company raised its earnings forecast for the full fiscal year by more than 3%, anticipating earnings per share of between $2.40 and $2.44.