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Starbucks’s fourth quarter earnings showed continued strength in its premium beverage offerings—particularly, of course, the Pumpkin Spice Latte.
Comparable global store sales rose 8% in Q4, with North American and US comparable store sales also up 8%, boosted by a 6% jump in average consumer spending and a 2% rise in transactions. Net revenue increased 11% YoY to $9.4 billion globally, and 12% to $6.9 billion in North America. The coffee giant also grew its margin to 23.2% in North America in the quarter, largely driven by a reduction in store operating expense as a result of investments in training and equipment.
- Starbucks anticipates global comparable sales to grow 5% to 7% for fiscal 2024.
CEO Laxman Narasimhan said the company’s fall product launches in late August, including the PSL (which celebrated its 20th anniversary this year), along with “apple-inspired” food and beverage products, contributed to record-breaking average weekly sales. Foot traffic on the PSL’s seasonal return to stores spiked more than 25% compared to its launch day in 2017, according to Placer.ai. EVP and CFO Rachel Ruggeri added that in the quarter, customers continued to “lean in” toward premium beverages and customization with options like its Pumpkin Cream Cold Foam.
- On November 2, Starbucks rolled out its holiday cups—they’re red, green, and magenta this year—along with holiday beverages and food items, including new items like Iced Gingerbread Oatmilk Chai along with several returning offerings.
Starbucks’s loyalty program membership in the US rose 14% YoY to 32.6 million 90-day active members in Q4, while spend per member and total member spend also hit record highs, Narasimhan noted. This rise in demand “speaks to the stickiness of our business,” Ruggeri said.
Narasimhan also said that despite the time of economic uncertainty, the company isn’t seeing any change in consumer sentiment.
“And I think what it does is it reflects the strength of the Starbucks brand globally, it reflects the loyalty of our customers, it reflects our position in their routine, and it also reflects the long-term durability of this business.”