Flat white sales boost Starbucks profit

JULY 26, 2015
News.com.au

STARBUCKS said its quarterly profit jumped 22 per cent as pricier drinks like flat whites and food helped lift sales at its U.S. cafes.
The Seattle-based coffee chain said sales rose 8 per cent in its flagship Americas unit. In the U.S., which makes up the majority of the unit, the company has been pushing up sales with price hikes and offerings like S’more frappuccinos and flat white espresso drinks that cost a little more.
Flat whites are an Australian invention that were introduced to American Starbucks menus at the beginning of the year.
Starbucks chief financial officer Scott Maw said in a phone interview that people are even “trading up” to newer, pricier breakfast sandwiches, such as one served on a croissant bun. Maw noted that more people are getting food with their orders as well.
Customer visits are increasing too, boosted by the company’s mobile app. The app, which incorporates its loyalty program, encourages people to return by rewarding them with “stars,” which can be used toward free drinks and food.
Lower costs for ingredients like dairy helped improve the company’s operating margin.
Earlier in the day, Dunkin’ Donuts said sales rose 2.9 per cent at established U.S. stores. Parent company Dunkin’ Brands Group also attributed the increase to higher customer spending and visits.
On a global basis, Starbucks Corp. said sales rose 7 per cent at established locations. That included an 11 per cent increase in Asia and a 3 per cent increase in the segment encompassing Europe, the Middle East and Africa.
Total revenue including new store openings rose 18 per cent to $US4.88 billion in the period, topping the $US4.86 billion Wall Street expected.