Here’s what emerges from the Starbucks earnings report

We recently reviewed Starbucks fourth quarter results (NASDAQ: SBUX), and the numbers were pretty impressive all around. But there were two stats in particular that stood out for some of our contributors. In this fool live Video clip, recorded January 28, Fool.com contributors Matt Frankel, CFP and Brian Withers discuss the numbers and what investors should watch out for going forward.

Matthieu Frankel: First off, you said comparable store sales in the United States were down 5% year-on-year, I think. It’s impressive for me, considering what’s going on. You can’t even walk into a Starbucks, like eating and sitting inside in most places.

Brian Withers: They talked about it because in this quarter, too, the coronavirus surged. For a while, they did not allow sitting. I think they’ve reopened it to about 60% of their stores in the US now. You can sit there, but I can’t imagine nobody [laughs] Who wants to do that.

Frankel: Normally I love to sit at Starbucks and work occasionally, it disrupts my routine. I haven’t done it lately. But what I’m really curious to see in the future is that you mentioned that the most interesting part of America for me was their ticket sales up 19%, you said, from year to year.

Withers: Surprisingly, yes.

Frankel: What I want to know is, will this continue after the pandemic? Because I have to think about it in large part because of the way people order now. For example, if I use Uber (NYSE: UBER) Eat to get Starbucks, I’m not going to buy the same coffee that I’m going to buy if I’m in a restaurant. I’m going to buy this, I’m going to have a sandwich, I’ll maybe get my kids a cake pop that my daughter loves, I’ll add some stuff. I’m wondering how long this is going to last and if it’s just going to balance out or if you’re going to see long tail store activity come back and it’s 19% more per ticket. Because it would be huge if they really did a great job of selling add-ons and upselling.

Withers: Yeah, it’s gonna be interesting. Roz Brewer, the chief operating officer, said group orders and things like that certainly won’t necessarily continue. But she said the increase in membership and attachment to food would likely continue and they saw a permanent bump. She has been a wonderful addition to the Starbucks family, but by the end of February, she will become CEO of Walmart (NYSE: WMT). I don’t know how many actions to place in his prediction. I absolutely think it will be interesting to increase the value of the ticket, even a few points are huge for a company like this.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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