Starbucks Q4 revenue, sales miss estimates but loyalty program use soars

·Reporter, Booking Producer
·3-min read

Starbucks (SBUX) posted fiscal fourth-quarter earnings results that mostly missed Wall Street estimates, but the coffee giant reported a spike in active Starbucks reward members as the fast food industry leans into digital in an effort to boost sales and drive customer loyalty.

Here's what the Seattle-based company reported, compared to Wall Street estimates, according to a Bloomberg consensus estimates:

  • Revenue: $8.1 billion versus $8.22 billion expected

  • Adj. earnings per share (EPS): $1.00 versus $0.99 expected

  • U.S. same-store sales: 22% versus 24.13% expected

  • International same-store sales: 3% versus 4.3% expected

Weakness abroad appeared to be the biggest drag on the coffee maker's results, as the Delta variant of COVID-19 took its toll on sales. For the fiscal quarter ended on October 3rd, 2021, comparable transactions in the U.S. increased by 18%, while the average ticket size went up 3% on record global revenues. 

But in China, same-store sales decreased by 7 percent, driven by a 5 percent decline in the average ticket and a 2 percent decline in transactions.

As the world grapples with the pandemic, Starbucks reported strength in its full year fiscal 2021 results, with global comparable sales up 20% — primarily driven by a 9% surge in transactions and a 10% increase in the average ticket.

“Our strong finish to fiscal 2021, including record performance in the fourth quarter, demonstrates the resilience of Starbucks and reinforces the value of the bold strategic moves we have taken over the past two years,” Starbucks President and CEO Kevin Johnson said in the release.

PEMBROKE PINES, FLORIDA - JULY 16: A view outside a Starbucks coffe store on July 16, 2020 in Pembroke Pines, Florida. Some major U.S. corporations are requiring masks to be worn in their stores upon entering to control the spread of COVID-19. (Photo by Johnny Louis/Getty Images
PEMBROKE PINES, FLORIDA - JULY 16: A view outside a Starbucks coffe store on July 16, 2020 in Pembroke Pines, Florida. Some major U.S. corporations are requiring masks to be worn in their stores upon entering to control the spread of COVID-19. (Photo by Johnny Louis/Getty Images

Starbucks customers seem to be flocking to the long-time rewards app, which it launched in 2008. Rewards loyalty program 90-day active members jumped to 24.8 million in the fourth quarter, up 28 percent compared to a year ago.

In the fourth-quarter 2021 results, the company recorded a one-time boost to operating income, to $1.3 billion compared to $506 million in the comparable year-ago quarter. However, that was mostly offset by costs associated with supply chain strains and higher prices.

This quarter, the company oped 538 new stores, which brings the company's total locations to a record 33,833 stores globally.

On Wednesday, the company announced a wage increase to $15 an hour by the summer of 2022. By the summer of 2022, Starbucks anticipates the average pay for all Starbucks' U.S. hourly partners to nearly $17 per an hour, with average hourly rates ranging between $15 to $23.

"We anticipate that our strong business momentum, increased operating efficiency and continued global store expansion will fund these unprecedented investments while delivering yet another year of significant growth,” Johnson added, addressing the third major investment by Starbucks in wage, benefits and support in the last 24 months.

Greg Portell, Kearney Partner and Consumer Practice Lead, weighed in on the wage increase in an interview with Yahoo Finance, noting that Starbucks has an "advantage" to tie this major investment in its labor force to a sense of meaning and purpose.

“That ability to drive labor will tie directly into their growth ambition, which will be the indicator of how fast they’re going to rebound" from the impact of the coronavirus pandemic.

Year-to-date, shares of Starbucks are up 5%, with shares up 25% compared to a year ago.

Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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