Starbucks Q4 - Big Shift In Consumption

Starbucks was another business from a long list which reported earnings on Thursday last week. The company hasn't received much attention this year, probably because it isn't sexy like the technology companies. Also, the share price is down around 3% for the year. Given how global lockdowns and working from home have impacted the food sector, Starbucks has done really well to remain flat in 2020. For their latest quarter, the company beat analyst estimations, it posted revenue of $6.2bn ($6bn was expected) and EPS of 52c (31c was expected).

Starbucks hasn't totally escaped Covid, its revenue figure was down 8%, driven by a same-store-sales drop of 9% for the quarter. In China, their second biggest market, sales were only down 3%. The standout stats in the results was their forecast for 2021. The company expects American growth to be between 17% - 22%, and international growth to be between 25% - 30%! It shows you the power of having a strong bran - giving resilience during a crisis and a strong re-bound post the fact.

What I found really interesting was the trend change in consumption. I regularly say that you can probably learn more from company results than from official statistics. Starbucks has seen a shift in consumption from Metros to suburbs, and the ordering times have moved from early mornings to mid-morning. They have also noticed a significant increase in weekend orders. Is this the new work from home routine? With less traffic, people don't need to leave the house as early. I'm not sure how to explain the weekend increase in sales?