Starbucks posts largely positive first quarter results, but mixed performances internationally highlight ongoing headwinds posed by the Omicron variant, inflation and staff shortages
Starbucks opened 484 net new locations in its first quarter for a total 34,317 stores globally | Photo credit: Starbucks
Starbucks has posted largely positive first quarter results as the Omicron variant, rising inflation and staff shortages continue to create a challenging trading environment globally.
Reporting its financial results for the 13 weeks ended 2 January, 2022, Starbucks said total net revenues grew 19% to $8.1bn, with net profits growing 31% to reach $816m over the period.
eanwhile, like-for-like sales increased 13%, driven by a 10% increase in comparable transactions and a 3% increase in average ticket.
In Starbucks’ flagship US market, revenues grew 23% to reach $5.3bn, with like-for-like store sales increasing 18% and the company opening net 160 outlets for a total of 15,500 stores.
However, Starbucks’ results were less favourable in China, where revenues decreased 2% to $897m, and like-for-like store sales fell 14% over the period. Nevertheless, the Seattle-based coffee chain opened net 694 stores its first quarter and now operates a total of 5,557 outlets in China, its key growth market.
The picture was also mixed across Starbucks’ International Segment, where revenues and profits increased 11.5% and 5.9% to reach $1.9bn and $300m respectively, but like-for-like sales and average ticket fell 3% and 5%.
Commenting on the results, Starbucks CEO and President Kevin Johnson hailed Starbucks’ performance but cautioned that the ongoing pandemic, rising costs and staff shortages continued to present headwinds for the coffee chain.
“As we enter the third year of this pandemic, our stores continue to play an important role as a community gathering place that offers safe, familiar and convenient experiences for our customers. Although demand was strong, this pandemic has not been linear, and the macro environment remains dynamic as we experienced higher-than-expected inflationary pressures, increased costs due to Omicron and a tight labour market. We remain focused on actions that drive both top and bottom-line growth, including industry-leading investments to attract, train and retain the best talent for our stores as customer occasions increase,” Johnson said.
Reflecting the ongoing boom in at-home coffee consumption around the world, Starbucks’ Global Coffee Alliance
with Nestlé also continues to reap rewards for the coffee chain. Revenues for its Channel Development Segment rose 12% to reach $417m, with profits growing 1% to $183m.
Starbucks opened 484 net new locations in its first quarter of 2022 for a total 34,317 stores globally, of which 51% and 49% were company-operated and licensed respectively.
Stores in the U.S. and China comprised 61% of the company’s global portfolio at the end of its first quarter, with 15,500 and 5,557 stores respectively.