By Heather Haddon 

Starbucks Corp. said customers are returning to its cafes quicker than expected, forecasting a return to sales growth next year.

The coffee giant on Thursday said same-store sales in its Americas region declined 9% in its latest quarter from last year's period, a better result than analysts expected. The chain benefited from larger orders as consumers have tended to load up on food and drinks during less frequent trips. Still, Starbucks reported a 25% reduction in transactions during its fourth quarter ended Sept. 27.

The Seattle-based company reported adjusted earnings of 51 cents a share, topping analyst projections. The chain said it expects to fully recover from the pandemic next fiscal year, and anticipates opening 2,150 new stores world-wide even as it closes hundreds of existing ones.

Shares rose 1% to $89 in aftermarket trading. Its stock was up 1% this year through Thursday's close.

Coffee and breakfast chains have been hit hard as the coronavirus has disrupted morning routines. Breakfast and brunch restaurants have suffered some of the highest rates of closures since the pandemic hit in March, according to data from listing site Yelp.

Starbucks, Dunkin' Brands Group Inc. and Dine Brands Global Inc. division IHOP are in the process of closing hundreds of stores. Chains have generally weathered the pandemic better than independent restaurants, though, and Starbucks and Dunkin' said they are opening new stores in areas with more business.

Dunkin's recovery from the pandemic in the U.S. has generally outpaced Starbucks's. The Canton, Mass.-based chain on Thursday reported a U.S. same-store sales increase of 1% in its latest quarter ended in September, and said that sales remained up its current period. Dunkin' had a large percentage of U.S. sales before the pandemic at drive-throughs, a key selling mechanism since the virus hit.

Starbucks traditionally focused more on sales in its stores. Starbucks is now building more to-go only stores and drive-throughs at suburban locations.

The company said it had restored lobby service to roughly 63% of its company-owned stores in the U.S. and 90% of those in China. Licensed stores that remained closed in the U.S. and Canada were largely in airports and on college campuses, the chain said. Starbucks was early to close its dining rooms when the pandemic hit.

For the quarter, Starbucks posted a profit of $392.6 million, or 33 cents a share, compared with $802.9 million, or 67 cents a share, in the comparable quarter last year. Sales of $6.2 billion were down from $6.7 billion during last year's period. Analysts expected sales of $6.1 billion.

For its full fiscal year, Starbucks reported earnings of 79 cents a share on profit of $928.3 million, down from $2.92 a share in the prior year. Global same-store sales fell 14% for the year.

Starbucks said it expects same-store sales globally to increase by 18% to 23% for its 2021 fiscal year. The chain anticipates opening 850 new stores in the Americas. It anticipates adding 600 stores in China.

Write to Heather Haddon at heather.haddon@wsj.com

 

(END) Dow Jones Newswires

October 29, 2020 16:49 ET (20:49 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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