Despite Weak Sales in China, Starbucks Posts Strong Q3 Performance... US Market Recovers to Pre-Pandemic Levels

3.3% Increase in Sales Compared to the Same Period Last Year

Starbucks [Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] The world's largest coffee chain, Starbucks, posted results exceeding market expectations for the July-September quarter this year, causing its stock price to rise more than 2% in after-hours trading. Despite sluggish performance in the Chinese market, strong sales at U.S. stores led to solid results.

According to CNBC and other sources on the 3rd (local time), Starbucks announced that its revenue for the fourth quarter of fiscal year 2022 (July 4 to October 2) reached $8.41 billion (approximately 12 trillion KRW), a 3.3% increase compared to the same period last year. Net profit fell 50.2% to $870 million, and earnings per share (EPS) decreased 9% year-over-year to $0.81.

This performance surpassed Wall Street expectations. Previously, financial data provider Refinitiv had forecasted revenue of $8.31 billion and EPS of $0.72.

Global same-store sales rose 7%, with U.S. same-store sales increasing 11%. However, sales in overseas markets excluding the U.S. declined by 5%. In particular, China, the second-largest market after the U.S., saw a sharp 16% drop in sales year-over-year due to the impact of COVID-19 prevention policies.

Howard Schultz, Starbucks CEO, stated, "Demand for Starbucks coffee surged worldwide this quarter and throughout the year."

Starbucks projects annual EPS growth of 15-20% and revenue growth of 7-9% over the next three years.

However, major foreign media explained that Starbucks' uncertainties can only be resolved once Laxman Narasimhan, who will succeed Schultz as CEO in April next year, addresses immediate challenges such as slowing sales at Chinese stores and unionization efforts.

Starbucks' stock, which had fallen 27% this year, closed at $84.68, up 0.12% from the previous day's closing price in regular trading, and rose 2.1% in after-hours trading following the earnings announcement.

This content was produced with the assistance of AI translation services.