Starbucks Customers Are Spending More Than Ever And It’s Not Due To Raised Prices

While Starbucks (SBUX) shared that its comparable-store sales were down 9% in the U.S. and 3% in China for the fourth quarter, the coffee chain is primed for a strong recovery amid the pandemic, and it may be because consumers are spending more.

Starbucks CEO and President Kevin Johnson said in a statement on Thursday, “Our strategies are working and I am optimistic that we will emerge from the COVID-19 pandemic as a stronger and more resilient company.”

The announcement from Johnson comes as Starbucks reported a decrease in comparable transactions, which the company said was partially offset by a 17% increase in the price of the average order. In the U.S., this was offset by a 21% increase in the average order and 5% in China.

In addition, more cold beverages and plant-based options were sold, which resulted in consumers spending more on their coffee orders, CNBC reported. Starbucks rolled out its annual Pumpkin Spice Latte in September while sales of its Pumpkin Cream Cold Brew and Frappuccinos were also up, the news outlet said.

While customers may have been spending more during the pandemic, net revenue for the company was $6.2 billion, down 8% from over a year ago. Starbucks has attributed the lost sales to the COVID-19 outbreak. As much as $1.2 billion was lost due to modified operations, reduced hours, reduced customer traffic, and temporary store closures, Starbucks said.

Net income for the quarter was $392.6 million, down $802.9 million from a year earlier. GAAP operating margin decreased by 16.1% from the previous year, also because of the coronavirus, while non-GAAP operating margin was down 17.2%, also compared Q4 2019.

Starbucks also said it opened 480 new stores in Q4, creating a 4% year-over-year growth, ending the quarter with 32,660 locations globally. The chain also saw its loyalty program membership increase to 19.3 million users for the quarter, up 10% year-over-year.

Shares of Starbucks were trading at $86.50 as of premarket trading on Friday, down $1.80 or 2.04%.