Starbucks releases the latest results! The Chinese market has a bright future!

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Starbucks reported fourth-quarter revenue of $8.4 billion on Thursday, according to the coffee chain Starbucks' fourth-quarter results for 2022 and its full-year results. Global same-store sales rose 7%, exceeding market expectations. Full-year net income rose 11 per cent year-on-year to $32.3 billion.

The company said same-store sales rose 11 per cent in North America, while international same-store sales fell 5 per cent and Chinese same-store sales fell 16 per cent.

Interim CEO Howard Schultz said: Starbucks' demand for coffee accelerated in the fourth quarter and throughout the year, proving that the company's earlier reshaping plan has taken a successful first step. The reshaping program will involve and enhance all aspects of the Starbucks partner, customer and store experience, and ideally enable Starbucks to achieve accelerated, sustainable, long-term, profitable growth and value creation from 2023.

In addition to the company's reshaping program, Starbucks launched a customer loyalty program in September to encourage members of the loyalty program and corporate partners to earn and buy digital stamp collections in the form of NFT, thereby unlocking exclusive experiences and rewards, which also helped the fourth gain. The number of active members of the loyalty program increased by 16% in the fourth quarter to 28.7 million.

CNBC, the US consumer news and business channel, attributed an 11 per cent increase in sales to Starbucks in North America as a result of an increase in average consumption and a slight increase in passenger traffic, and beverage prices were up 6 per cent from 2021.

Starbucks responded that the current sales of drinks at cold drink stations are more than 75%, which is mainly contributed by Z-era, because young consumers like to customize their drinks and share them on social media.

As a result, customers are more likely to add expensive syrup to cold drinks, use dairy substitutes, like cold bubble products, and so on, pushing up their prices. But customers are also buying hot coffee drinks. Sales of pumpkin spice lattes are up 70 per cent compared with the same period last year, according to Sara Trilling, president of Starbucks North America.

In the Chinese market, government restrictions on Covid-19 continue to put pressure on Starbucks' international performance. According to StreetAccount, international same-store sales fell 5 per cent, less than the 7.1 per cent decline expected.

Same-store sales in China, Starbucks' second-largest market, fell 16% in the quarter. However, compared with the revenue in the third quarter of this year, the sales revenue of the Chinese market has improved for a consecutive quarter.

Starbucks China's net income in the fourth quarter narrowed significantly by 29 percentage points from a 38% decline in the third quarter to a 9% decline in the current quarter. Same-store transaction volume also understood that it fell 43% in the third quarter, returning to a 17% decline in the fourth quarter, and the average unit price of same-store customers increased by 1%.

The domestic epidemic situation has been serious again in the past few weeks, so Howard expects the uncertainty caused by repeated outbreaks to continue, but also reiterated his long-term confidence in the Chinese business!

Howard said the company was excited by the dawn of recovery in the Chinese market in the fourth quarter, whether it was innovation, stronger ties between customers online and offline and brands, or improved epidemic restrictions. are the reasons for the positive improvement in sales potential and the continuous improvement in quarter-on-quarter performance.

Starbucks financial officers forecast Starbucks' fiscal 2023 results that revenue will grow by 10% by 12%. Same-store sales in the US market will grow by 7 per cent and 9 per cent. Taking into account the performance of the Chinese market in fiscal year 2022 and the impact of restrictions, Starbucks China's sales revenue in the first quarter of 2023 is not ideal, but there will be a large growth later.

Photo Source: Internet