Starbucks’s Same-Store Sales Growth in Q2

Starbucks (SBUX) posted an SSSG (same-store sales growth) of 3.0% across the system and outperformed analysts’ estimate of 2.9%.

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Let’s look at the performance across the segments

During the quarter, the Americas segment posted an SSSG of 4.0%. The segment’s transactions rose marginally from the same quarter the previous year. Starbucks’s management credited the improved in-store experience of its restaurants and a strong performance from the beverage platform for its positive SSSG. The beverage platform contributed 3.0% to the segment’s SSSG with its cold platforms like Iced Espresso and Iced Coffee delivering a strong performance. The food part contributed 1.0% of the SSSG.

The company continued to expand its Starbucks Rewards program with the addition of 0.5 million members to increase the membership to 16.8 million by the end of the quarter. Starbucks also expanded its delivery program to ~1,600 restaurants across seven markets in the United States. The initiatives drove the segment’s SSSG during the quarter.

The CAP (China and Asia-Pacific) segment posted an SSSG of 2.0%. China and Japan posted a strong performance. In China, Starbucks posted an SSSG of 3.0%. The favorable pricing and mix contributed 4.0%, while a decline in transactions had a negative impact on the company’s SSSG by 1.0%.

During the quarter, the company added one million members in China to raise the total number of members on the Starbucks Rewards program to 8.3 million. In Japan, the company’s SSSG was 3% with a strong performance coming from blended and Espresso beverages and growth in the Starbucks Rewards program.

The EMEA segment posted an SSSG of 2.0%. Ticket size growth contributed most of the growth in same-store sales.