Starbucks (SBUX) has long been known for its bustling morning business, but now the coffee giant is setting its sights on boosting its afternoon sales. CEO Brian Niccol recently shared on the company’s earnings call that while morning transactions continue to grow, there is room for improvement in the afternoon.
To revitalize its afternoon business, Starbucks is focusing on a combination of new beverage and food offerings, as well as refining its routines for the afternoon shift. The company sees significant potential for growth in the midday and afternoon hours, with $11 billion in sales generated after 11:00 a.m.
One of Starbucks’ recent initiatives to drive afternoon sales is the introduction of new energy drinks, known as Refreshers, in April. Additionally, the company is testing wraps and preparing to launch a line of sparkling beverages to attract more customers during the afternoon hours.
Niccol emphasized that there is still ample opportunity to increase transactions both in the morning and afternoon, highlighting the progress Starbucks has made in both day parts. The company’s focus on restaurant basics and afternoon operations has proven successful, with global comparable-store sales rising 7.9% and adjusted earnings surpassing analysts’ forecasts.
With an expanded operating margin and strong performance in the third quarter, Starbucks raised its full-year guidance, signaling continued momentum heading into the fourth fiscal quarter. This positive outlook has driven a 6% increase in the company’s stock price, outperforming the S&P 500 by nearly four times this year.
In conclusion, Starbucks’ renewed focus on its afternoon business is paying off, with improved sales and profitability under Niccol’s leadership. The company’s innovative menu offerings and operational enhancements are driving growth and positioning Starbucks for continued success in the competitive coffee market.
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