The boost was due in part to a big increase in traffic, which was up 4 percent across the globe in stores that were open a year.
Strong growth in same-store sales helped Starbucks reach a record $19.2 billion in annual sales for fiscal 2015, more or less enough cash to buy a short latte for every human on Earth. And for next year, the coffee giant upped its guidance for sales growth at existing stores.
So-called comparable sales — measuring stores open for at least a year, a key metric of health among retailers — rose 8 percent across Starbucks’ global operations. Half that increase was driven by more frequent visits to the stores, the company said.
It’s the 23rd time “comps” exceeded the 5 percent mark, according to CEO Howard Schultz. That performance, accelerated in the last year by a bevy of technology deployments that include mobile order and pay, as well as deals with Lyft and Spotify, has led the company to revise the language it has used for years to describe next year’s growth target.
Instead of vaguely aiming for “mid-single digit growth,” the company says in 2016 it will deliver growth “somewhat above mid-single digits.”
Most Read Business Stories
- Millions of stimulus payments were mailed as prepaid debit cards. Some say they look like scams.
- Amazon presses for in-person voting for unionization election in the midst of a pandemic
- IRS pushes back start of 2020 tax filing season
- Worries about West Seattle Bridge have not swamped the neighborhood's housing market
- Suzi LeVine, head of Washington state's embattled unemployment agency, to take job in Biden administration
It may seem just a small change in wording, but publicly traded companies like to be conservative. “We want to be very straightforward and try to underpromise and underdeliver,” Schultz told analysts in a conference call Thursday.
The executive tied Starbucks’ recent performance to the amount the company has invested in its workforce, from pay raises to a college-degree subsidy. Schultz said that “our comp results are strongest where we are having our greatest success in reducing turnover,” a common affliction of the retail industry.
The $19.2 billion revenue figure, up 17 percent, was also boosted by Starbucks’ buyout of its Japanese partner last year.
Annual profit also reached record levels, at $1.58 per share for the year, up 19 percent from 2015.
For the quarter, profit was 43 cents per share, up 10 percent, on revenues of $4.9 billion, up 17.6 percent, in line with Wall Street expectations.
The results underscore Starbucks’ continuing joy ride as it finds new places to put new stores, even in the Starbucks-packed U.S., and new ways to squeeze money out of customers.
Shares traded at $61.86 after hours, down 1.0 percent but near a record. The company’s market capitalization is around $94 billion, prompting Schultz to remark during the conference call with analysts how close it is to reaching $100 billion.
“How far we’ve come from that small coffee company in Seattle that had 125 stores” at the time of its 1992 initial public offering, he said.
There are some bumps on the road, made more significant by Starbucks’ role as a big global company: The first fiscal quarter of 2016, which includes the holiday season, will see significant headwinds as a stronger dollar cuts into profit, but the other quarters will make up for it, executives said.
Starbucks expects to generate about $21 billion in sales in fiscal 2016.
Some analysts were upbeat. S&P Capital IQ reiterated its “buy” opinion on Starbucks shares, and raised its 12-month target price by $3 to $68.
Neil Saunders, CEO of Conlumino, a retail consultancy, said Starbucks closed its fiscal year “on a high note.”
“For a company of Starbucks’ size and scale, such results are exceptional and a testament to the company’s innovative attitude, as well as the continued relevance of coffee across many geographies,” he said.
Mobile order and pay, which last month completed its rollout throughout the U.S., also played a significant role, with over 5 million transactions a month.
Adam Brotman, the Starbucks executive in charge of digital initiatives, said that its success was most visible in the chain’s busiest stores.
In places like the World Financial Center in New York and at the Cleveland Clinic in Ohio, more than 10 percent of transactions are done through this channel, he said.