Dive Brief:
- Starbucks’ U.S. same-store sales rose 7.7% in Q4, driven by a 5.2% increase in ticket size and 2.4% transaction growth, according to the chain’s earnings release.
- The results are a notable shift from last quarter, when traffic accounted for a slight majority of the chain’s nearly 8% comps growth.
- Starbucks’ investments in remodeling stores, refocusing marketing and retooling in-store service are continuing to yield positive results, CEO Brian Niccol said on the chain’s earnings call. That set of strategies, which began as a turnaround plan, has now become a growth plan, Niccol said.
Dive Insight:
Starbucks’ accumulating changes to marketing, store design and menu resulted in “sales growth [that] remains broad-based across income levels, generations and dayparts,” Niccol said.
Despite the importance of ticket growth to its recent comps, Starbucks intends to restrain price increases, CFO Catherine Smith said on the earnings call.
“Any pricing [in 2027] will remain focused and well below [the Consumer Price Index],” Smith told analysts.
William Blair analyst Sharon Zackfia said in a research note that the chain’s ticket growth in Q4 “was balanced across pricing, food attach, mix, and delivery.” About 50 basis points of Starbucks’ sales increase came from merchandising, Zackfia noted, as new merchandise like the brand’s Peanuts collaboration accompanied seasonal menu launches.
Those seasonal menu launches likely also increased ticket, as premium LTOs are likely to command a higher price than standard drinks. This year’s fall menu launch, headlined as always by the Pumpkin Spice Latte, was the strongest fall lineup deployment in the chain’s history.
On the traffic side of the equation, increased frequency among Starbucks rewards members helped drive transaction increases, as consumers moved up through the system’s new tiers, Smith said.
The company projected continued comps growth in 2027, albeit at a moderate pace compared to the roughly 7% growth of the last three quarters. Smith said the chain expects 4% comps growth, driven by menu innovation, improved service, delivery orders “and a small contribution from uplifts and sales transfer from coffeehouse closures.”
For at least the second-consecutive year, Starbucks clustered the closure of underperforming units at the end of its fiscal year — resulting in about 250 U.S. closures concentrated at the end of September and start of October. Smith said that closures led to about 200 basis points of comps growth as consumers shifted from closed stores to new ones.
