By Nivedita Balu
(Reuters) – Starbucks Corp <SBUX.O> forecast 2021 earnings largely above estimates on Thursday, helped by strong online orders and a recovery in demand following the initial hit from the COVID-19 pandemic.
The coffee chain was forced to close many stores and limit operations to takeout and delivery at the height of the COVID-19 pandemic, but sales have since improved as consumers used the company’s app to order and collect at stores.
For the fourth quarter, comparable sales fell 9%, compared with Wall Street estimates of a 12.13% decline, as consumers picked up their morning coffee at cafes as they gradually returned to their daily routines.
Starbucks shares fell more than 1% in after-hours trading.
Chief Executive Officer Kevin Johnson said Starbucks’ recovery in U.S. and China, its biggest growth markets, was faster-than-expected.
The coffee chain now expects adjusted profit for fiscal 2021 between $2.70 per share and $2.90 per share. Analysts had forecast $2.74, according to IBES data from Refinitiv.
Starbucks’ recovery could be seen as lagging other restaurant chains, including Chipotle Mexican Grill Inc <CMG.N> and large pizza companies, whose sales either remained elevated during the pandemic or have turned positive in recent weeks.
Rival coffee chain Dunkin’ Brands <DNKN.O> earlier on Thursday reported U.S. comparable store sales growth of 0.9% for the quarter.
Excluding one-time time items, Starbucks reported 51 cents per share, 20 cents more than expectations.
It also reported a 17% rise in the average ticket price during the quarter.
(Reporting by Nivedita Balu in Bengaluru; Additional reporting by Hilary Russ in New York; Editing by Shounak Dasgupta and Aurora Ellis)
The post Starbucks sees better-than-expected earnings for 2021 appeared first on Morningology.
