Starbucks China Sales Surge 46% in 2023, But Revenue and Same-Store Sales Fall Short of Expectations
Starbucks experiences a remarkable 46% sales increase in China as COVID-19 restrictions ease in 2023, yet overall revenue and same-store sales miss analyst forecasts, prompting a revised profit outlook.
Bill McColl brings over 25 years of expertise as a senior producer and writer across TV, radio, and digital platforms, leading news teams through major global stories.
Highlights
- Starbucks sees a significant 46% surge in sales within China following the relaxation of COVID-19 measures.
- Company revenue hits an all-time high of $9.17 billion but falls short of market predictions.
- Comparable store sales increase by 10%, below analyst expectations.
- Starbucks narrows its full-year 2023 earnings growth forecast to 16%-17%.
In the third quarter of fiscal 2023, Starbucks (SBUX) posted earnings per share (EPS) of $1.00, surpassing analyst estimates. Despite a 12.5% rise in revenue to a record $9.17 billion, the figures did not meet Wall Street projections, with same-store sales climbing 10% but still below forecasts.
China, Starbucks’ second-largest market, drove a remarkable 46% increase in sales, boosting the international segment’s growth by 24%. This recovery follows an 18% drop in overseas comparable store sales the previous year due to decreased demand in China.
North America saw a 7% rise in comparable store sales, slightly underperforming expectations. However, the number of transactions increased by 1%, and the average purchase value grew by 6%. CEO Laxman Narasimhan noted that customers are opting for larger beverages and premium add-ons rather than downsizing.
The company has only just begun to tap into the vast potential of the Chinese market, indicating significant opportunities for further expansion, according to Narasimhan.
Starbucks adjusted its 2023 profit growth forecast downward to a range of 16% to 17%, from the prior estimate of 15% to 20%.
Following the earnings announcement, Starbucks shares rose 2.8% in early trading and have gained over 4% year-to-date.
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