Starbucks Q1 - Beat Expectations

Last week, Starbucks reported its earnings for the holiday quarter which showed strong growth in sales and digital platform activity, notwithstanding Covid-induced staff shortages. The Seattle-based chain of coffeehouses has 34 317 stores around the world. Revenues for the quarter came in at $8.05 billion (up 19% year-on-year) and net profit was $815.9 million, both beating expectations.

Same-store sales were 13% higher, thanks to a 10% increase in comparable transactions and a 3% increase in the average purchase. North America is still the leader by far with same-store growth of 18%, while the fast-growing Chinese operation suffered a same-store sales decline of 14% due to stricter lockdowns ahead of the Winter Olympics.

Despite the headwinds of high inflation, supply chain shortages, and staffing challenges, Starbucks managed to reach 26.4 million active members for its rewards program, up 21% from a year earlier. Rewards members now represent 53% of in-store spend, a new high. These people spend three times more than non-members.

Starbucks enjoys incredible customer demand for their coffee products. We like this business, which has shown remarkable resilience through the pandemic, and has a bright future. It's always a good time to have a cup of coffee. You should have one now.