Starbucks today announced its Q2 FY21 earnings results, demonstrating full sales recovery in the U.S and forward momentum globally. While the COVID-19 pandemic is not over, this momentum gives the company confidence to raise full year guidance for the remainder of FY21.

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“I am very pleased with our progress to date in fiscal 2021, as our second quarter results demonstrated impressive momentum in the business with full sales recovery in the U.S.&nbsp; Our strong results validate our ability to adapt to changes in our environment and the needs of our customers,” said Kevin Johnson, president and ceo.&nbsp;

“We have positioned Starbucks for the inevitable great human reconnection that we see unfolding in the U.S. and will propagate in every market around the world, where people once again connect with others face-to-face to heal, to belong, to reflect, to share and to celebrate.&nbsp; Starbucks was built for this moment, and as we celebrate our 50th anniversary, we remain confident in our ability to execute our ‘Growth at Scale’ agenda and unlock the full potential of the Starbucks brand,” concluded Johnson.

Full details on Starbucks financial results can be found <a href="https://stories.starbucks.com/press/2021/starbucks-reports-q2-fiscal-2021-results/" target="_blank" rel="noreferrer noopener">here</a>.

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1. Starbucks ‘Growth At Scale’ Agenda Drives Continued Momentum

With its Growth at Sale agenda in place well before the global pandemic emerged, Starbuck quickly set guiding principles and established store protocols to navigate the pandemic globally. The company continues to monitor events in real-time, quickly adapting to changing conditions and working to provide safe, familiar and convenient experiences for our partners (employees) and customers.

With vaccination programs underway, and in turn, increased customer mobility, the company has begun to see what it describes as “The Great Human Reconnection,” which is coming to life in stores globally as the COVID-19 vaccine distribution progresses at varying rates. This was evidenced by sales in the U.S., where second-quarter comparable store sales rose to 9% in the U.S., with average ticket meaningfully higher than pre-pandemic levels. Importantly, the company furthered its 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;

In China, Starbucks reported a 91% comparable store sales growth, including VAT favorability of approximately 9 percentage points. As COVID-related travel restrictions subsided late in the quarter, the market saw momentum in customer mobility, particularly in the residential, office and commercial trade zones. In Q2, Starbucks opened 110 net new stores, equating to 14% growth in net new stores over the past 12 months. This week, Starbucks announced the company’s 5,000th store opening in China, demonstrating continued confidence in Starbucks long-term growth opportunity in China.

2. As Customers Seek Reconnection, Starbucks Provides Convenient, Elevated And Personalized Experiences With continued focus on building connections between partners and customers, Starbucks strives to meet customers where they are, even as transactions have migrated from dense metro centers to suburbs, and from cafés to drive-thrus. The company reported that affinity for Starbucks has strengthened, as measured by improvements in customer connection scores and growth in customer loyalty, which further reinforces the strength and resilience of the Starbucks brand and healthy optimism for the future.

The drive-thru channel has improved quarter-over-quarter since the onset of the pandemic, and Starbucks continues to invest in several initiatives to increase throughput. including updated operational standards, “hand-held order devices,” more efficient warming ovens, and accelerated deployment of our more efficient Mastrena Espresso machines. As a result, Drive-Thru saw a slight improvement in “out-the-window” times versus the prior year. Out-the-window drove over 50% of net sales in Q2, increasing more than 10% from pre-pandemic levels.

As the Great Human Reconnection gains momentum, and in anticipation of behaviors and daily routines continuing to evolve, Starbucks is meeting customers wherever they may be, with the right store, in the right place, and at the right time.

3. Increased Strength Of Digital Customer Relationships Drives Results Through Starbucks Rewards™ And Beyond

Digital continues to be a significant growth driver for the company, with the Starbucks Rewards™ loyalty program continuing to exceed pre-COVID levels.

The Starbucks Rewards program saw continued growth in member spend, accounting for 52% of U.S. company-operated sales in Q2, reflecting strong member engagement, and the program grew to a record 22.9 million* members in the quarter. The loyalty program’s member base has expanded by 19% following the launch of <a href="https://stories.starbucks.com/stories/2020/seeing-stars-more-ways-to-pay-and-5-fun-facts-about-starbucks-rewards/">Stars for Everyone</a>&nbsp;just six months ago.

The company’s digital capabilities are credited with successfully transforming digital relationships to drive mobile ordering, while also amplifying convenience and safety which remain top of mind for customers. Mobile orders represented 26% of U.S. company-operated transactions in Q2, up from 18% a year ago.

In China, the number of 90-day active Starbucks Rewards members more than doubled versus the prior year to 16.3 million, driving 72% of sales in China, up 5 percentage points from prior year. In addition, the company expanded the Starbucks Now™ mobile order and pay service to WeChat, making mobile ordering services available to customers on both Alibaba and WeChat ecosystems, as well as on the Starbucks App. Mobile Order sales mix hit a record 24% of sales in China, up from 30% in Q1, with 15% driven by Starbucks Delivers and 19% from Starbucks now. Starbuck Rewards customers engagement continues to grow as mobile order sales have more than doubled in China over this past year.

4. Starbucks Cold Beverage Menu Continues to be Hot

With a focus on relevant new hand-crafted beverages, Starbucks Winter and Spring menus resonated with customers and drove momentum. Cold beverages delivered resounding year-over-year growth in Q2 led by Cold Espresso, Starbucks Refreshers and Cold Brew. The company also reported overwhelmingly positive response to <a href="https://stories.starbucks.com/press/2021/oatly-oatmilk-coming-to-starbucks-nationwide-in-the-us/" target="_blank" rel="noreferrer noopener">Oatmilk</a>, with the Iced Brown Sugar Oatmilk Shaken Espresso far exceeding expectations to-date. This has helped push year-over-year growth of 53% in alt-dairy beverage sales as customers continue to gravitate toward the company’s leading portfolio of non-dairy beverage options.

In the U.S., average ticket remains meaningfully higher than pre-pandemic levels, driven by a combination of increased beverage attach, increased customization and all-time high food attach, with plant-based options and breakfast sandwiches leading the way.

5. At Home Coffee Amplifies Brand with Increased Category Share

Throughout the quarter, availability of Starbucks products through multiple channels gained further relevance as Starbucks share of total packaged coffee outpaced the category, growing over 8% in dollar sales in the U.S. in Q2. Starbucks remained the number one brand in total coffee in the U.S. and was the top share gainer of the coffee category in Q2, gaining nearly one and a half points over the prior year.

Internationally, Starbucks products on single-serve platforms, including Nespresso and Dolce Gusto, continue to exceed expectations. The Global Coffee Alliance is now in 71 markets around the world, up from 48 markets in Q2 FY20.

In addition, consumption of U.S. ready-to-drink coffee products (in partnership with PepsiCo) grew more than 23% in the quarter, over a 5% increase from Q1. The company recently launched new beverages, including the <a href="https://stories.starbucks.com/stories/2021/revamp-your-daily-coffee-ritual-with-new-starbucks-cold-and-crafted-and-more/" target="_blank" rel="noreferrer noopener">Cold &amp; Crafted platform and new Nitro Cold beverages</a>, leveraging last year’s Starbucks Nitro RTD platform launch, the number one innovation in the RTD category.

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*90-day active Starbucks Rewards members as of Q2

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Starbucks today announced its Q2 FY21 earnings results, demonstrating full sales recovery in the U.S and forward momentum globally.

Key takeaways from Starbucks Q2 FY21 Earnings Results

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Q2 Comparable Store Sales Growth of 9% in the U.S.; Demonstrating Full Sales Recovery

Q2 Comparable Store Sales Growth of 91% in China, Including Reinstated VAT Benefit

Q2 GAAP EPS $0.56; Non-GAAP EPS $0.62 Reflecting Meaningful Margin Improvement from Prior Quarter

Active Starbucks® Rewards Membership in the U.S. Up 18% Year-Over-Year to 22.9 Million

Raising Full-Year Fiscal 2021 Revenue, Margin and Earnings Per Share Guidance

SEATTLE; Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal second quarter ended March&nbsp;28, 2021.&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.

PDF: <a href="https://stories.starbucks.com/uploads/2021/04/Starbucks-Q2-FY21-Earnings-Release.pdf" target="_blank" rel="noreferrer noopener">Detailed financial data</a>

Q2 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/38937/indexl.html" target="_blank" rel="noreferrer noopener">live audio webcast</a>.

"Starbucks was built for this moment, and as we celebrate our 50th anniversary, we remain confident in our ability to execute our ‘Growth at Scale’ agenda and unlock the full potential of the Starbucks brand," said Kevin Johnson, president & ceo.

Starbucks Reports Q2 Fiscal 2021 Results

https://stories.starbucks.com/press/2021/starbucks-reports-q2-fiscal-2021-results/

Q2 FY21

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