Starbucks posts strong results as IPO of rival Luckin Coffee is imminent

In the second quarter, Starbucks posted solid results in key markets in the United States and China, as the coffee giant prepares for increased competition from its Beijing-based rival, Luckin Coffee.

The Seattle-based company posted earnings per share of 60 cents, exceeding Wall Street estimates according to Refinitiv data, while its quarterly revenue of $ 6.31 billion was in line with expectations.

Overall Starbucks' same store sales increased 3%, slightly exceeding expectations and driven by a 4% average customer bill. Comparable sales increased 4% in the United States and 3% in China.

"Starbucks has recorded a new quarter with strong operating results, demonstrating that our" scale growth "program is working," Starbucks President and CEO Kevin Johnson said in a press release. . "We are particularly pleased with the growth of our comparable sales in our two largest markets, the United States and China, where we also continue to drive the development of new stores with higher returns. With solid financial results in the first half, we are on track to meet our commitments for the full year. "

The profit was beaten a few days after Luckin tabled its initial public offering to raise $ 100 million. The Beijing-based company, which focuses on fast-moving transactions and mobile orders from the simplified layout of the stores, has announced plans to open 2,500 new stores in China in 2019 alone. Luckin already operates 2,370 sites in China, while Starbucks has more than 3,700 stores in the region.

Starbucks has raised its earnings guidance for fiscal 2019, noting that it is now expecting an adjusted earnings per share of $ 2.75 to $ 2.79, compared to a previous projection of 2 $ 68 to $ 2.73.

The number of Starbucks Rewards loyalty program participants increased by 13% to 16.8 million active members. The company has revised its loyalty program in recent quarters.

Starbucks reported opening 319 net new stores in the second quarter, 94% of which are located outside the United States. The chain now operates more than 30,000 sites worldwide.

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Shares rose slightly after normal trading hours.