SEATTLE — With vaccination programs underway and consumer mobility increasing, executives at Starbucks Corp. have begun to see what they call “the great human reconnection.”
“As we saw the rate of vaccinations start to hit 3 million to 4 million vaccinations a day, you really start to see how this great human reconnection unfolds,” said Kevin R. Johnson, president and chief executive officer of Starbucks, during an April 27 conference call with analysts. “We saw it unfold in all dayparts.”
Recovery largely has been a tale of two segments, with urban stores in central business districts lagging behind suburban drive-thrus.
“We are seeing recovery, though, in those metropolitan areas,” Mr. Johnson said. “I think that's going to take a little longer for businesses to bring employees back to work and reshift those traffic patterns.”
Net income in the second quarter ended March 28 was $659 million, equal to 56¢ per share on the common stock, up sharply from $328.4 million, or 28¢ per share, in the same period a year ago. Quarterly revenues grew 11% to $6.7 billion from $5.6 billion a year ago.
In Starbucks’ Americas business unit, quarterly revenues were $4.66 billion, up 8% from $4.33 billion a year ago. Operating income rose 46% to $905 million.
While US comparable transactions declined 10% in the second quarter, comparable store sales increased 9%, driven by a 21% increase in average ticket. Customers enrolled in Starbucks’ loyalty rewards program grew 18% year-over-year, with rewards members driving 52% of US company-operated sales in the second quarter.
Continued robust drive-thru activity contributed to higher ticket sales, with consumers ordering multiple drinks and larger sizes, Mr. Johnson said. The company also benefited from consumers buying more expensive coffee beverages and adding food to their orders.
“Customers have responded extremely well to the new beverage platforms we have introduced, with a focus on relevant new handcrafted beverages that deliver on wellness trends, offer customers choice and support our sustainability agenda,” Mr. Johnson said.
Cold beverages delivered year-over-year growth in the second quarter, driven by Cold Espresso, Starbucks Refreshers and Cold Brew.
“Also driving strength in cold beverages was our spring lineup, which launched in early March,” Mr. Johnson said. “We have seen an overwhelmingly positive response to oat milk, with the Iced Brown Sugar Oatmilk Shaken Espresso far exceeding expectations to date.”
The Iced Brown Sugar Oatmilk Shaken Espresso helped push year-over-year growth of 53% in dairy alternative beverage sales.
“Plant-based also is resonating in food, with the Impossible Breakfast Sandwich delivering record performance, which, alongside other breakfast sandwiches and cake pops, pushed food attach to record highs,” Mr. Johnson said.
The average ticket may moderate as consumers become more mobile in the weeks and months ahead, said Rachel Ruggeri, executive vice president and chief financial officer.
“We believe that we’ll have a slightly elevated ticket as we continue to drive food attach and premiumization of our products as well as shifting customers into cold platforms, but we will see our ticket moderate,” she said.