Starbucks attracted more customers in the latest quarter on an expanded line up of beverages and food offerings in China and the United States, leading the coffee chain to raise its fiscal 2019 profit forecast.
Shares of the company rose nearly six percent to 96.40 U.S. dollars and were on track to hit a record high, after the world's largest coffee chain posted its biggest same-store sales growth in three years.
Starbucks has been trying to make its menu more appealing by adding new beverages, while also expanding the delivery side of its business with new partnerships, including cooperation with Alibaba across 2,900 stores in China.
China has quickly become one of Starbucks' most important markets. /VCG Photo
The added food options and Nitro Cold brew, a rich coffee that has a foamy texture like beer, lured more customers to stores during lunch hours, which is typically the slowest time of the day, the company said.
Those efforts led to a three percent growth in traffic in the second quarter.
"(Traffic is) an area where Starbucks has struggled," Edward Jones analyst Brian Yarbrough said. "A lot of investors were asking: 'When are you going to see a traffic increase?' ... This is a nice quarter on that standpoint."
The in-store traffic trend was encouraging as Starbucks and other restaurants had been raising prices to buffer bottom lines as more customers increasingly use mobile apps to order food and beverages.
The company has also been investing heavily in China by opening new stores and expanding delivery to cater to increased demand for on-the-go coffee, following the emergence of rival Luckin Coffee.
Same-store sales rose five percent in China and the Asia-Pacific region, beating analysts' estimates of 3.45 percent growth, according to IBES data from Refinitiv. In the Americas, same-store sales surged seven percent.
The company opened 442 stores worldwide in the last quarter, a third of which were in China.
The company is now expecting same-store sales near the top end of its fiscal 2019 forecast of 3 to 4 percent growth and raised its earnings forecast to between 2.80 and 2.82 U.S. dollars per share.
Total net revenue for the third quarter rose 8.1 percent to 6.82 billion U.S. dollars.