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11/02/2024 03:29:01 pm

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Starbucks U.S. Hits Higher Sales After Food Menu Upgrade

People lining up in a Starbucks store

(Photo : Reuters)

Starbucks Corp announced higher quarterly sales after introducing new menu items in their U.S. cafes.

The world's biggest coffeehouse chain posted a report for its third fiscal quarter on Thursday that shows higher sales growth of six percent at established stores around the world.

The report included a higher-than-expected rise of seven percent in U.S. outlets, while analysts from Thomson Reuters predicted only an increase of 5.3 percent globally.

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A boost in food purchases helped increase the chain's sales in the U.S., according to Troy Alstead, Starbucks' chief financial officer. Alstead noted in particular the 40 percent growth of their breakfast sandwiches compared to the sales last year.

Starbucks has been rolling out new packaged products. It has revamped food items in their stores to diversify from its coffee business norm.

The push to persuade customers to buy food items when they come in for a drink has been successful since Starbucks introduced bakery items and breakfast sandwiches. The items include a new salad box, beef brisket baguettes, grilled cheese and chicken sandwiches.

In the latest quarter, Teavana Oprah Chai, a blend designed by Oprah herself, has been introduced in different Starbucks outlets. The launch also helped drive growth, Alstead said in a phone interview with analysts.

In addition, Starbucks also partnered with Danone SA, a French food corporation, last year to trade Greek yogurt parfaits and other items.

The chain's net income was US$512.6 million for the latest fiscal quarter. It is equivalent to 67 cents per share. The income was higher than last year with only US$417.8 million or 55 cents per share. Its revenue increased to 11 percent with US$4.15 billion compared to the projected $4.14 billion increase by analysts.

Starbucks set targets of at least 10 percent rise on its revenue for fiscal 2015. Income per share is expected to rise to 15 to 20 percent from its 2014 earnings.

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