Starbucks (Q1)

Higher sales and profit

Starbucks reports different sales trends for the domestic and international markets.
IMAGO / Dean Pictures
Starbucks reports different sales trends for the domestic and international markets.

Strong sales growth was achieved by the world's largest coffee bar chain at the end of the year - despite a new virus variant. However, the macroeconomic environment remains dynamic and Starbucks expects higher costs and a tight labor market due to Omikron. In the first quarter of 2022, which ended Jan. 2 for Starbucks, the company made gains primarily in existing space. However, only in North America and the United States. International markets (including China) were down in the first three months of the new quarter.

The company continues to focus on measures to drive sales and earnings, according to Kevin Johnson, president and CEO. These include investments to "attract, train and retain the best talent for our stores."

Highlights of the first quarter

  • Global Comparable Sales increased 13 percent, driven by a 10 percent increase in transactions and a higher average receipt.
  • Comparable sales in North America and the U.S. increased 18 percent.
  • In International Coffee Bars, Comparable Sales decreased 3 percent, driven by a 5 percent decrease in average receipt, which in turn was offset by a 2 percent increase in comparable transactions.
  • In China, comparable sales declined 14 percent, driven by a 9 percent decline in average selling price and a 6 percent decline in transactions. Influencing factors included the withdrawal of the VAT exemption in the Chinese market, according to Starbucks.

Starbucks opened 484 net new stores in the first quarter of fiscal 2022, representing 4 percent year-over-year growth. In total, Starbucks has exactly 34,317 coffee bars worldwide as of January 2 , 2022, of which 51 percent are company-operated and 49 percent are licensed units.

Consolidated net sales of $8.1 billion increased 19 percent year-over-year, primarily due to a 13 percent increase in comparable store sales. Starbucks achieved 31 percent plus in profit, which was $816 million.

In the Starbucks Rewards loyalty program, with 90 days of active membership, the company now has 26.4 million participants in the U.S., up 21 percent year-over-year