Starbucks makes full recovery to exceed pre-pandemic revenues – but fresh Covid-19 restrictions in China could spell trouble in the coffee chain’s second largest market
Starbucks CEO Kevin Johnson pictured with employees at an Annual Meeting of Shareholders in 2019 | Photo credit: Starbucks Coffee Company
Starbucks has shrugged off a difficult year of trading to exceed its pre-pandemic earnings. The world's largest coffee chain posted full-year revenue growth of 23.6% to $29.1bn – 9.8% higher than the $26.5bn earned in 2019
Fourth quarter revenues to 30 October 2021 were $8.1bn – a 31.3% increase compared to the same period in 2020.
“Our strong finish to fiscal 2021, including record performance in the fourth quarter, demonstrates the resilience of Starbucks and reinforces the value of the bold strategic moves we have taken over the past two years. Through it all, we have thoughtfully navigated a strong recovery with an eye towards our future, all guided by our Mission and Values,” said Starbucks President and CEO Kevin Johnson.
In Starbucks’ flagship US market, fourth quarter revenues jumped 37% to $5.3bn compared to the same period in 2020, reflecting the favourable impact of the Covid-19 vaccine roll-out and a loosening of trading restrictions.
US like-for-like store sales increased 22%, driven by a 19% increase in comparable transactions and a 3% increase in average ticket. The coffee chain also saw healthy growth in its Rewards loyalty programme, with 90-day active members in the US increasing 28% year-on-year to 24.8 million.
However, Starbucks’ performance in China, its second largest market globally, was hampered by fresh Covid-19 restrictions across the country towards the latter part of the quarter. Like-for-like store sales decreased 7%, driven by a 5% decline in average ticket and 2% fall in transactions.
Nevertheless, Starbucks still posted 18% year-on-year revenue growth to $964m over the quarter.
Starbucks International business posted fourth quarter revenues of $1.9bn, with full year sales rising 32.3% to $6.9bn.
The Seattle-based coffee chain opened net 538 stores in its fourth quarter, ending the period with 33,833 stores around the world, of which 51% and 49% were company-operated and licensed, respectively.
Sixty-two percent of Starbucks’ stores are now located in the US and China, with the company operating 15,450 and 5,360 stores in each market respectively.
Looking to the year ahead, Johnson said he anticipated “strong business momentum increased operating efficiency and continued global store expansion” would generate further significant growth.