Starbucks today announced its Q1 FY21 earnings results, reaffirming an optimistic outlook for the long-term and reinforcing that Starbucks is stronger and more resilient than ever.

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“I am very pleased with our start to fiscal 2021, with meaningful, sequential improvements in quarterly financial results despite ongoing business disruption from the pandemic. Investments in our partners, beverage innovation and digital customer relationships continued to fuel our recovery and position Starbucks for long-term, sustainable growth,” said Kevin Johnson, president and ceo.&nbsp;

“Our results demonstrate the continued strength and relevance of our brand, the effectiveness of the actions we’ve taken to adapt to changes in consumer behavior and the steadfast commitment of our green apron partners to serve our customers and communities. We remain optimistic about our robust operating outlook for fiscal 2021 as well as our ability to unlock the full potential of Starbucks to create value for our stakeholders,” concluded Johnson.

Full details on Starbucks financial results can be found <a href="https://stories.starbucks.com/press/2021/starbucks-reports-q1-fiscal-2021-results/" data-type="URL" data-id="https://stories.starbucks.com/press/2021/starbucks-reports-q1-fiscal-2021-results/">here</a>.

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1. Starbucks ‘Growth at Scale’ agenda is fueling a global business recovery

This week marks a full year since the company temporarily closed stores across China to protect partners and customers from the Coronavirus, and quickly established <a href="https://stories.starbucks.com/press/2020/navigating-through-covid-19/">guiding principles</a>&nbsp;used to navigate the pandemic globally. One year later, the company reports that its business in China recovered in Q1 in line with expectations, and it remains on track to achieve full sales recovery of its U.S. business by the end of Q2.

In China, Starbucks reported an impressive 5% comparable store sales growth and emphasized the rapid re-acceleration of new store development in the market. In Q1, the company opened almost 160 stores and crossed the 4,800-store milestone, equating to 13% growth in net new stores over the last 12 months.

In the U.S., first-quarter comparable store sales of -5% in the U.S. improved from the prior quarter and the company continues to see average ticket meaningfully higher than pre-pandemic levels. Throughout the quarter, the company laid a solid foundation for achieving FY21 goals by further advancing the three business-driving initiatives fundamental to the company’s “Growth at Scale” agenda: elevating the customer experience, driving relevant beverage innovation, and expanding digital customer engagement.&nbsp;

While this recovery has not been linear, Starbucks is well-positioned to continue to monitor events in real-time and will adapt to the changing conditions in markets around the world.

2. Adapting to changing customer behaviors leads to elevated customer experience As many of our customers have adapted to their work-or-study from-home realities, the company believes Starbucks visits have evolved from “the stop” on the way to a destination to becoming the destination worth leaving home for – and because it is familiar and convenient. &nbsp;

Starbucks has continued to evolve to meet this behavior, prioritizing partner and customer safety, including increasing throughput in drive-thrus, expanded digital reach which maximizes the ability to order ahead, enable curbside pickup and expand delivery capabilities. This work was evident in Q1 with U.S. stores with drive-thrus recording slight improvements in "out-the-window" times, delivering positive comps throughout the quarter and driving over half of net sales in Q1, increasing more than 10% from pre-pandemic levels.

The company is confident its targeted initiatives to unlock capacity and enhance the customer experience at our drive-thru locations are boosting business recovery while strengthening our foundation for future growth.

3. Growth of digital customer relationships drives results – with Starbucks Rewards™ leading the way

Following a successful launch of Stars for Everyone&nbsp; in the U.S. in Q4, the Starbucks Rewards™ loyalty program achieved phenomenon results in Q1, providing a strong foundation for growth in fiscal 2021 and beyond.

In the U.S., the program grew to a record 21.8 million members* - a 2.5 million increase within the quarter - surpassing pre-COVID totals and representing a 15% increase relative to the same quarter in the prior year. Engagement from Starbucks Rewards members also increased, with these customers contributing 50% of U.S. company-operated sales, up from 43% last year and up from 47% in the prior quarter.

In China, the Starbucks Rewards program grew to 15.4 million in Q1, a record increase of 51% versus the prior year and 14% over the previous quarter. China also reported strong engagement in digital initiatives, including setting a single-day retail sales record on the region’s “Starbucks Rewards Members Night.” Member engagement campaigns and additional functionalities boosted member engagement and frequency throughout the quarter.

4. Cold continues to be hot

Pumpkin Cream Cold Brew’s success in last quarter’s lineup provided a preview to the December return of the new Holiday favorite, Irish Cream Cold Brew, delighting customers. Starbucks Cold beverages continued to resonate with customers, led by Iced White Chocolate Mocha, Iced Chai Latte and Vanilla Sweet Cream Cold Brew, with all three delivering positive year-over-year growth.

In the U.S., the company reported an increase in average ticket, driven by a combination of group ordering and increased beverage attach, premium beverage mix, increased customization and all-time high food attachment drove U.S. ticket growth of approximately 19% in Q1.

5. Powerful partnerships secure channel leadership

The availability of Starbucks products through multiple channels has secured Starbucks leadership position in the category, acting as a brand amplifier for our specialty coffee retail business.

Demand in Starbucks at-home coffee remains high and, in the U.S., Starbucks share of total packaged coffee grew significantly in the quarter with dollar sales up nearly 14%, nearly twice the category average. Through the Global Coffee Alliance with Nestle, the company finished calendar year 2020 as the number one coffee brand across the entire coffee category. With Nestle, Starbucks entered four new markets in the quarter, bringing Starbucks at-home coffee presence through the Global Coffee Alliance to 66 markets in just over two years.&nbsp; &nbsp;&nbsp;

In addition, consumption of U.S. ready-to-drink coffee products (in partnership with PepsiCo) grew 18% in the quarter and the introduction of Ready-to-Drink Nitro Cold Brew, which was the number one innovation in the category last year, exceeded sales expectations.&nbsp;

Fond Farewells and Warm Welcomes&nbsp;

During the call, Starbucks leaders welcomed incoming chief financial officer, Rachel Ruggeri who will assume the role on February 1, as the company announced last month with the planned retirement of current cfo Patrick Grismer.

Additionally, the company shared today that chief operating officer Roz Brewer has accepted a new opportunity as chief executive officer at another publicly traded company and her responsibilities will be assumed by Rossann Williams, president&nbsp; of our North America retail business, and Brady Brewer, executive vice president and chief marketing officer. Combined, Rachel, Rossann and Brady have more than 45 years of Starbucks experience, and the company remains well-positioned for the future.

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*90-day active Starbucks Rewards members as of Q1 FY21

Key takeaways from Starbucks Q1 FY21 Earnings Results - Starbucks Stories

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Key takeaways from Starbucks Q1 FY21 Earnings Results

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Q1 Comparable Store Sales of -5% in the U.S. and 5% in China, Demonstrating Sustained Recovery

Q1 GAAP EPS $0.53; Non-GAAP EPS $0.61 Reflecting Substantial Margin Improvement from Prior Quarter

Active Starbucks® Rewards Membership in the U.S. Up 15% Year-Over-Year to 21.8 Million

Fiscal 2021 Outlook Reaffirms Path to Full Recovery

SEATTLE –&nbsp; Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal first quarter ended December&nbsp;27, 2020.&nbsp; GAAP results in fiscal 2021 and fiscal 2020 include items that are excluded from non-GAAP results.&nbsp; Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

“I am very pleased with our start to fiscal 2021, with meaningful, sequential improvements in quarterly financial results despite ongoing business disruption from the pandemic.&nbsp; Investments in our partners, beverage innovation and digital customer relationships continued to fuel our recovery and position Starbucks for long-term, sustainable growth,” said Kevin Johnson, president and ceo.&nbsp;

PDF: <a href="https://stories.starbucks.com/uploads/2021/01/Starbucks-Q1-FY21-Earnings-Release.pdf">Detailed financial data</a>

Q1 Fiscal 2021 Highlights

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Visit the <a rel="noreferrer noopener" href="https://investor.starbucks.com/ir-home/default.aspx" target="_blank">Investor Relations page </a>to access the <a href="https://78449.themediaframe.com/dataconf/productusers/sbux/mediaframe/38935/indexl.html">live audio webcast</a>.

Investments in our partners, beverage innovation and digital customer relationships continued to fuel our recovery and position Starbucks for long-term, sustainable growth.

Starbucks Reports Q1 Fiscal 2021 Results

https://stories.starbucks.com/press/2021/starbucks-reports-q1-fiscal-2021-results/

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