Mobile Commerce

Starbucks Sees Uptick In Q2 Mobile Orders, Payments

Starbucks reported second quarter results that showed a big uptick in mobile ordering and an increase in its rewards program.

For Starbucks’ second quarter, which the company reported on Tuesday (May 2), the coffee chain operator said active U.S. membership in its Starbucks Rewards grew 11 percent year over year to 13.3 million members, while mobile payments reached 29 percent of transactions and Mobile Order and Pay grew to 8 percent of transactions.

For the quarter, the company reported comparable store sales increased 3 percent both globally and in the U.S. and 7 percent in China. Consolidated net revenue in the three-month period increased 6 percent to $5.3 billion, setting a second quarter record, while operating margins reached 17.7 percent in the quarter. On an earnings per share basis, Starbucks said results were up 15 percent year over year.

“With our U.S. business accelerating throughout the quarter and strong performance in China, we are poised to deliver strong revenue growth in the second half and into the future,” said Kevin Johnson, Starbucks president and CEO said in an earnings press release. “Our success in opening over 2,000 stores around the world annually, delivering record AUV and profit, despite a very difficult period for many brick-and-mortar retailers, is a testament to the 330,000 partners who proudly wear the green apron.” The strong showing out of Starbucks comes amid a shakeup in management.

In April, Kevin Johnson officially started as Starbucks’ new CEO — just in time to try and turn the ship around as the coffee giant’s business slowed. The company has had six years of 5 percent growth as a baseline — but in 2017, that hot streak came to an end, and Starbucks started missing sales targets.

What brought that weakness on remains up for debate. One offered explanation is that mobile order-ahead, designed to bust lines, had actually just moved the line from the cash register to the coffee pick-up area. Johnson stepped in to replace CEO Howard Schultz — with a promise to get the business back on track with 5 percent growth in its same-store sales.

 

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