Starbucks Q2 - China Sales Down

When a business expands globally, it reaches millions of new clients, but that comes with extra risks. Starbucks is one of the most global brands in the world, but is battling outside of the US.

According to their quarterly results released last week, they have closed all of their stores in Russia and sales dropped 23% in China due to Covid lockdowns. Elsewhere, rising wage, fuel and coffee prices crimped margins. The Starbucks share price has been under pressure lately, which makes sense.

On the plus side, same-store sales in the US grew by 10%, driven by young people who really like the brand. 80% of beverages on the menu are now cold or iced, and 75% of sales in the US are either delivery, drive-through or pre-ordered through the app. That's incredible.

If you were overly worried about unforeseen challenges you would never invest in shares. The trick is to invest in companies that can overcome anything. Starbucks has proven time and time again that they can cope with the hard times and come out stronger.

Starbucks is well-placed to thrive in the years ahead as mobility increases after Covid and people want to socialise and drink delicious coffee.