Starbucks Q4 - US & China Shines

Starbucks reported pleasing results for the September quarter, citing steadfast demand for its summer drinks. The coffee giant's share price surged 9.5% on the news, its largest one-day gain since May 2022.

Revenue for the quarter came in at a record $9.4 billion, up 11% year-on-year with same-store sales rising 8%, surpassing the 6.3% average analysts had pencilled in. Starbucks now has 38 038 stores across the globe and is probably one of the few US companies enjoying success in China.

Over time Starbucks has enjoyed a higher number of transactions and larger orders since people are now ordering meals as well. A lot of this is due to their clever loyalty program which has 32.6 million members, up 16% year-over-year.

The outlook for the next few quarters is a little murky in light of China's economic slow economic recovery and concerns about the health of US consumers. Starbucks has lowered its global and US same-store sales growth outlook for the coming year to 5% to 7%.

Despite the more modest sales target, Starbucks still aims for annual revenue growth of 10% to 12% and earnings per share to climb by 15% to 20%. We have confidence in the company's momentum and global reach. Coffee is a very popular product and this is a good company to hold in your portfolio.