Starbucks posts record revenue amid strong U.S. traffic, higher prices
Starbucks Corp. reported better-than-expected fourth-quarter earnings and sales as it opened hundreds of stores and customers flocked to its cafes.
The coffee giant opened 816 net new stores during the quarter, for a total of 38,038 locations (52% company-operated and 48% licensed). Stores in the U.S. and China (its second largest market after the U.S.) comprised 61% of the company’s global portfolio, with 16,352 and 6,806 stores in the U.S. and China.
Starbucks forecasts that it will grow its global footprint by 7% in fiscal 2024. Its U.S. footprint is expected to grow 4%, while China’s will rise 13%.
The company reported net income of $1.219 billion, or $1.06 a share, for the quarter ended Oct. 1, up from $878.3 million, or 76 cents a share, in the year-ago period. Adjusted earnings per share also came to $1.06, easily topping the $0.97 per share analysts had expected.
Net revenue rose 11.4% to $9.374 billion, topping estimates of $9.290 billion. Global same-store sales rose 8% amid higher average checks and a 3% increase in store traffic. U.S. and North American same-store sales rose 8%. The average check in Starbucks’ home market increased 6%. Traffic was up 2%.
Starbucks forecasts that it will grow its global footprint by 7% in fiscal 2024. Its U.S. footprint is expected to grow 4%, while China’s will climb 13%.
For the full year, Starbucks’ global comparable store sales increased 8%, driven by a 5% increase in average ticket and 3% increase in comparable transactions. North America and U.S. comparable store sales increased 9%, driven by a 6% increase in average ticket and 3% increase in comparable transactions
Starbucks’ stellar results come as the company continues to revamp its stores to make them more efficient. In September 2022, the company said that, as part of its “reinvention strategy,” it was investing $450 million to modernize its existing stores in North America with new equipment and technology to enable greater efficiency and reduced complexity for store employees.
“We finished our fourth quarter and full fiscal year strong, delivering on the higher end of our full-year guidance,” stated Laxman Narasimhan, who took the reins as CEO in March. “Our Reinvention is moving ahead of schedule, fueling revenue growth, efficiency and margin expansion. Notably, we continue to see the positive impact of our Reinvention on our partner and customer experiences, proof points that we can continue to create, grow and strengthen our business while creating value for all. “
“As we enter the current year, in the face of macro uncertainty, we remain confident in the momentum throughout our business and headroom globally,” Narasimhan said.