(Reuters) - Starbucks Corp (O:SBUX) reported a better-than-expected rise in quarterly sales at established cafes on Thursday, helped by strong growth in the United States and a rebound in China, sending its shares up more than 8 percent.
The company has been struggling to maintain its dominance in the United states as it wrestles with increased competition from high-end coffee shops and fast-food chains.
To battle mounting competition and streamline its operations, the world's biggest coffee chain is revamping its owned and licensed businesses, closing Teavana stores, laying off employees, and introducing newer and fresher food and drinks to its menu.
The company's sales at established U.S. cafes rose 4 percent in the fourth quarter ended Sept. 30, higher than the 2.76 percent rise expected on average by analysts, according to IBES data by Refinitiv.
Quarterly same-store sales in China also rose 2 percent, reversing a decline from the third quarter and driving a 3 percent rise in global comparable store sales.
The coffee chain's business in China, its fastest-growing market in recent years, slowed significantly last quarter amid fierce competition and stricter regulations on delivery services.
Since then the company has partnered with Alibaba (N:BABA) to deliver its coffee in Chinese cities.
"Starbucks record Q4 performance reflected meaningful improvement in virtually every critical operating metric compared to Q3," Chief Executive Officer Kevin Johnson said.
Total net revenue rose to $6.30 billion, beating expectations of $6.27 billion.
Excluding items, the company earned 62 cents per share also beating expectations of 60 cents.
However, net income attributable to the company fell to $755.8 million from $788.5 million.
Starbucks shares were up 8.6 percent at $63.67 in after-hours trading.