Starbucks beats same-restaurant sales estimates on digital push

(Reuters) – Starbucks Corp (O:) beat quarterly same-restaurant sales estimates on Wednesday, as the world’s largest coffee chain’s loyalty program and new delivery options boosted demand and helped fend off competition, especially in the U.S. and China.

Shares rose 3% in extended trading after as of the Seattle-based company also forecast 2020 comparable restaurant sales largely above estimates.

Starbucks has beefed up its “Rewards” program with perks including access to Happy Hours events and the ability to skip lines with a mobile payment option as it battles rising competition from niche independent coffee shops in the United States, as well as local startups such as Luckin Coffee (N:) in China.

The program saw its active membership in the United States jump 15% to 17.6 million in the fourth quarter.

Sales at restaurants open for at least 13 months rose 5% in the fourth quarter ended Sept. 29. Analysts had forecast same-store sales growth of 3.95%, according to IBES data from Refinitiv.

Total net revenue rose 7% to $6.75 billion, beating the average analyst estimate of $6.68 billion.

Net earnings attributable to the company rose to $802.9 million, or 67 cents per share, from $755.8 million, or 56 cents per share, a year earlier.

Excluding one-time items, the company earned 70 cents per share, matching Wall Street estimates.

Starbucks said it expects fiscal 2020 global comparable restaurant sales to rise 3% to 4%, while analysts had expected a 3.3% increase.

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