Starbucks says it is seeing demand heat up as China recovers
Starbucks has had a strong second quarter, with sales higher than expected. The company attributes this to increased demand in the U.S. and China.
FILE – A Starbucks in Havertown (Pa.), Tuesday, April 26 2022. Starbucks will report their earnings on May 2, 2023.
Matt Rourke/AP
Starbucks posted stronger-than-expected sales in its fiscal second quarter as demand in China began to recover and it opened nearly 500 new stores around the world.
Seattle Coffee said on Tuesday that it's net revenue for the period January-March jumped by 14% to $8.72 Billion. Analysts polled by FactSet said that this was higher than the $8.41 million Wall Street forecast.
Sales at the same store -- that is, stores open for at least one year -- increased by 11% due to an increase in traffic. This also exceeded analysts' expectations of a 7.3% rise.
In China, same-store sales were up by 3%. This reversed a 29% drop the company experienced in October-December due to an increase in COVID infections. In North America same-store sales increased 12%. The company also reported higher store visits and spending per visit.
Starbucks reported that it opened 464 new stores, 100 of which were in North America. Starbucks is closing stores that have been underperforming and replacing them in high-traffic areas, or with smaller stores that focus on drive-thru or pickup business.
Starbucks' profits rose by 35%, to $908 millions. After adjusting for one-time expenses, Starbucks earned 74 cents a share. This also beat the analysts' prediction of 65 cents.