Loyalty members, sales push Starbucks profit higher in Q3

Coffee-shop chain Starbucks posted third-quarter earnings on Thursday, with net revenue jumping 11% to a record $6.3 billion. Profit was up 13% y-o-y at $0.62 per share meeting market consensus. Comparable store sales were up 1% both globally and in the US, sending shares up 0.5% in after-market trading shortly after the results were announced.

Starbucks (SBUX) also posted a 14% rise in US memberships to its loyalty program, hitting 15.1 million in the quarter. With cash returned to shareholders crossing $5 billion in the fiscal year, the chain benefited from its move in the Eastern part of the world.

For the quarter, SBUX noted a 3% net benefit from the consolidation of the East China business and other activities to streamline its business in the area, including the divestment of Tazo, the closing of Teavana mall stores and the move to licensed stores from company-owned ones across international locations.

Closely following Amazon’s (AMZN) Prime model, the ‘Starbucks Rewards’ loyalty program that added at least 1.9 million members in the US this quarter seem to have raked in at least 40% of the US company-operated sales.

The recently implemented Mobile Order and Pay made up 13% of the company-operated transactions in the US.

Starbucks looks to be a good position now with 28,720 stores across 77 markets – adding 511 net new stores in the quarter.

Starbucks ordered to pay for off-the-clock tasks of employees

Earlier on Thursday, Starbucks and other employers in California were ordered by the state Supreme Court to pay their workers for the time spent off the clock on routine tasks like locking up, cleaning, or setting the store alarm.

Hailed as a victory for the hourly workers in the state, this ruling could also spur new suits against employers in California.

The unanimous ruling was a big victory for hourly workers in California and could prompt additional lawsuits against employers in the state. The judge who presided in the lawsuit by Starbucks employee Douglas Troester noted that “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.” Troester has demanded to be paid for 4-10 minutes for these off-the-clock tasks, amounting to 12 hours and 50 minutes over a 17-month period. At $8 an hour, it added to $102.67.