Starbucks reported excellent financial results for the first quarter, beating analysts' expectations. The coffee chain's revenue rose 6% to $9.9 billion, and same-store sales increased 4% — the company's best U.S. performance in two years. Starbucks shares jumped more than 9%, helped by popular holiday drinks and frenzied demand for $30 bear-shaped glass mugs that sold out almost immediately.
The growth came amid large investments by Starbucks to modernize its stores: the company is hiring additional staff, upgrading equipment and aiming to create a cozier atmosphere. However, these improvements, along with coffee tariffs, are putting pressure on profitability. Adjusted earnings per share were $0.56, slightly below analysts' forecast of $0.59.
Notably, the positive traffic trend in the U.S. persisted despite a strike by more than a thousand unionized Starbucks workers. The protest was timed to the "Red Cup Day" — one of the busiest days of the year, when the company traditionally hands out free reusable cups to holiday drink customers. The strike led to temporary closures of some locations but failed to derail the overall strong quarter.
Based on: Holidays and a viral bear cup drive strong quarterly sales at Starbucks