Starbucks’ revenue rose 3% to a record $8.41 billion in its fiscal fourth quarter thanks to U.S. customers who shrugged off higher prices on frothy drinks and snacks.
The Seattle coffee giant said Thursday its same-store sales —— or sales at locations open at least a year —— were up 7%. That beat Wall Street’s forecast of a 4.2% increase, according to analysts polled by FactSet.
Starbucks shares rose 3% in after-hours trading.
The North American strength offset weakness in China, where pandemic lockdowns are still impacting sales. Same-store sales jumped 11% in North America, driven by a 10% increase in spending per visit.
Same-store sales in China, Starbucks’ second-largest market after the U.S., fell 16%.
Starbucks said its net income fell 50% to $878 million in the three-month period that ended Oct. 2 as it invested heavily in store remodels and employee wages. Adjusted for one-time items, the company earned 81 cents per share. That also beat Wall Street’s forecast of 72 cents.
Starbucks has been spending heavily on a plan to boost U.S. store efficiency and employee morale as it tries to head off a growing unionization movement, which it opposes.
At an investor meeting in September, Starbucks announced it will invest $450 million next year to make its North American stores more efficient and less complex. Employees have struggled with rising demand for customizable cold drinks in store kitchens designed for simpler hot drinks.
The company also announced a $1 billion investment in employee wages and benefits last fall and added $200 million more for pay, worker training and other benefits in May.
