By Julie Jargon
Starbucks Corp. is scheduled to announce its
fiscal-third-quarter earnings after the market closes on Thursday.
Here's what you need to know:
EARNINGS FORECAST: Net income of $0.41 a share is the consensus
of analysts surveyed by Consensus Metrix, compared with $0.67 a
year earlier.
SAME-STORE SALES AND REVENUE FORECAST: Analysts are expecting
Starbucks to post a 6.2% increase in global same-store sales for
the quarter, driven by its China and Asia Pacific segment. The
company is expected to report revenue of nearly $4.9 billion,
compared with $4.2 billion a year earlier.
WHAT TO WATCH:
MOBILE PAY: Starbucks has been leading the industry with an app
that allows customers to order and pay ahead for their coffee using
their phones, allowing them to bypass the line in stores. Starbucks
began testing the app in Portland, Ore., in December and then
rolled it out to all 650 stores in the Pacific Northwest in March.
A recent survey from RBC Capital Markets suggests it is going to
reshape the way people expect to order and pay for things. The
survey found that 14% of orders in that region are coming from the
app and that customers who use it, on average, spend 15% more than
those who don't. Starbucks rolled out the app to 3,400 additional
stores in the southern and central U.S. last month.
FOOD: Food sales are becoming increasingly important to
Starbucks as it branches out beyond coffee. A higher percentage of
its sales are coming from food as Starbucks seeks to woo guests
with reasons to visit its cafes during off-peak hours such as lunch
and dinner. Late last year Starbucks said it plans to double its
annual revenue from food in the U.S. to more than $4 billion in the
next five years. The company acknowledged that the quality of its
food didn't always match the quality of its coffee, so it acquired
Bay Bread LLC and its line of La Boulange baked goods in 2012. The
company recently decided to close the La Boulange pastry shops,
located mostly in San Francisco, but the brand lives on in its
cafes.
LOYALTY: Starbucks has been looking for new ways to leverage its
popular rewards program, by which customers earn stars that can be
redeemed for drinks. Starbucks has 10 million customers signed up
for its rewards program. Starbucks in May teamed up with
music-streaming service Spotify to allow its subscribers to get
reward points they can redeem at Starbucks, in the first of what
Starbucks Chief Executive Howard Schultz said will be similar
tie-ups with other companies. Loyalty programs are critical ways
for companies to retain and attract new customers, and investors
might be wondering what Mr. Schultz has in mind next to grow its
customer base.
Write to Julie Jargon at julie.jargon@wsj.com
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