• by Steve Ellwanger , August 3, 2021

Loyalty rewards and cold coffees lit a fire under Starbucks Corp.’s latest financial results compared to early pandemic days.

The biggest potential reversal of fortune for the world’s #1 coffee chain:The only loyalty shown by the Delta variant of COVID-19 is to continual societal disruption.

In the third quarter ended June 27, Starbucks posted revenue of $7.5 billion, up 78% year-over-year.

In the United States, the chain saw revenue growth of 90% YoY—a recovery from the crippling impact of the pandemic with regard to store shutdowns, particularly in dense urban areas.

Compared to the third quarter of 2019, revenue increased by 16%.

Two-year, comparable same-store sales rose 10%, representing “the high end of our long-term annual comp growth target of 4% to 5%,” president and CEO Kevin Johnson told financial analysts on a conference call last week.

“We posted these results even with mobility restrictions still impacting some U.S. geographies—with industrywide pressure in pockets of the supply chain and with our in-store cafe seating not yet fully reopened.”

Given demand for such offerings as Starbucks Cold Brew, Nitro Cold Brew and Starbucks Refresher beverages, the cold category represented 74% of beverage sales—up 10 percentage points over the past two years.

Starbucks continues to reap the benefits of its Starbucks Rewards loyalty program following a major upgrade less than a year ago. Slightly more than 24 million active program members now represent 51% of all U.S. sales.

“We know that when customers join Starbucks Rewards, they spend more,” Johnson said. “There is more frequency and more engagement from those customers -- and that’s why, over a multiyear period, we have this aspiration to double the number of active rewards members in North America.”

The company has completed nearly 80% of its store restructuring involving closings and new locations. Drive-though transactions now constitute 75% of total U.S. sales.

“There is no question that Starbucks knocked it out of the park with their Q3 earnings,” the financial platform Seeking Alpha wrote last week. “But the question in many investors' minds is whether the growth is returning to normal or just transitory due to poor 2020 comps.”

Financial blog Pinxter Analytics raised a red flag over COVID cases spiking “to levels not seen from back when the pandemic just started” in states like Florida, Missouri and Texas “where the company has a lot of operations.”

On a positive note, Pinxter noted that in the event of “an overall market or economic downturn,” Starbucks could close down “underperforming branches given the close proximity of multiple branches in major cities without losing sales volume.”