The Seattle-based coffee chain appears on track to meet its ‘Reinvention Plan’ goals after reporting robust revenues, like-for-like sales and outlet growth around the world
Starbucks CEO Laxman Narasimhan (right) completed the coffee chain’s barista training programme before taking the helm in March 2023 | Photo credit: Starbucks
Starbucks has posted strong sales and outlet growth in the US and China – its largest and key growth markets – alongside robust results for its international business.
Reporting its second quarter results for the three months ended 2 April 2023, Starbucks posted 14% total net revenue growth to $8.7bn.
The Seattle-based coffee chain opened 464 net new stores around the world during the period, inclusive of closures across North America and Internationally, as part of ‘ongoing efforts to strengthen the portfolio’.
Starbucks ended the period with 36,634 stores globally, comprised of 51% company-operated and 49% licensed outlets.
In US and Canada, Starbucks expanded 3% by outlets to reach 17,482 stores, with 12% like-for-like sales growth unchanged from the corresponding period in 2022. Total revenues for the North American market grew 17% year-on-year to $6.38bn with operating income growing 31% to $1.21bn.
In Starbucks’ second largest market, China, the coffee chain saw revenues grow 3% to reach $768.3m, with 10% outlet growth to reach 6,243 stores.
Like-for-like sales growth rebounded to 3% from a 23% decline a year ago, when China’s now lifted Zero Covid policy caused widespread trading disruption.
At the end of the second quarter stores in the US and China comprised 61% of Starbucks’ global portfolio.
Meanwhile, Starbucks’ International segment achieved 9% revenue growth to reach $1.85bn, with 8% net outlet growth to 19,152 stores and 7% like-for-like sales growth down 1% on the year previous.
The growth was broadly in line with targets in Starbucks’ ‘Reinvention Plan’, which set ambitious development goals, including 10-12% revenues growth, 3-4% net stores growth and 7-9% like-for-like sales growth annually.
“I am very pleased with our Reinvention progress and grateful for the opportunity to fully immerse into the company, which I formally took over on March 20, 2023,” said Starbucks CEO, Laxman Narasimhan
“From my immersion observations, our leadership team now has a clear line of sight into our growth headroom, as well as our opportunities to enhance margins and modernise the business, brand, partner experience and culture of Starbucks,” Narasimhan added.
The strong results will be welcome news for Narasimhan, who took the helm as Starbucks CEO following a delicate transition process under the stewardship of interim CEO Howard Schultz.