Amid increasing customer mobility and the beginning of a “great human reconnection,” Starbucks saw the ranks of its 90-day active Starbucks Rewards members in the U.S. soar 48 percent year-over-year to 24.2 million.
“While it is very clear that our rewards program has accelerated our recovery in a meaningful way, where Q3 really stands out, and what adds to our confidence is the acceleration we saw in our non-rewards customers. While reward spend grew at a rapid mid-teens rate quarter over quarter, for the first time in 11 quarters, non-reward spend growth outpaced SR spend,” Starbucks President and CEO Kevin Johnson said on the firm’s Q3 earnings call.
Johnson said that the trend is more evidence of “the great human reconnection,” noting that the “rapid reengagement of non-rewards customers not only propelled our record results, but also underscores the strength of the brand and the growth potential ahead.”
Johnson also noted that the investments the company made in the last few years in its “coffee-forward cold beverage platform” keep strengthening sales and bring new customers to the company.
To that end, the firm keeps seeing formidable demand for Starbucks cold brew, nitro cold brew and Starbucks Refreshers drinks. He noted that the cold category comprised 74 percent of beverage sales in Q3.
Moreover, Johnson noted that customers love to customize their beverages. “Over the last two years, we’ve seen a meaningful increase in customizations, such as adding cold foam or a shot of espresso,” Johnson said.
In terms of pandemic recovery, Johnson said that “the reopening of markets is translating to incredible increases in demand for Starbucks as people are again on the go, reconnecting and socializing with one another.”
Internationally, Johnson said that the health of the company’s business in China is “strong” and that the firm has “never been more confident in the long-term growth opportunity.”
“In addition to significant new store growth and sequential acceleration of two-year comps in China, we are expanding digital customer relationships and engagement by creating new occasions and experiences that make mobile ordering even more convenient and personalized,” Johnson said.
In all, management said that global comparable-store sales soared by 73 percent, fueled by a “75 percent increase in comparable transactions, partially offset by a 1 percent decrease in average ticket.”
Consolidated net revenues of $7.5 billion grew 78 percent compared to the prior year, mainly driven by the 73 percent increase in comparable-store sales and strength in U.S. company-operated sales in the current year.
Starbucks’ latest earnings report comes on the heels of the coffee company celebrating its 50th anniversary in March.
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