Starbucks Q1 - Big profit growth

Global coffee chain Starbucks had results out last week and the numbers were reasonably well-received. Global revenues were $9.4 billion for the three months and profits rose by 22% due to various efficiency improvements. They will pay out a nice quarterly dividend, at an annual yield of 2.34% per annum.

Starbucks now has 38 587 shops worldwide, of which 16 466 are in the US and 6 975 are in China. They spend about $3 billion a year on opening and equipping new stores. They are often in fun locations, like this one in Kobe, Japan.

Coffee drinking is gaining traction around the world as the middle class expands. Starbucks sells more than just cups of hot black coffee and shots of espresso. They also serve up a dazzling array of caffeinated milkshakes and iced drinks.

The stock price was rather quiet in 2023, probably because Starbucks' second most important market, China, is going through a tough patch. Forward guidance was a little underwhelming, full-year global same-store sales are expected to rise between 4% and 6% in 2024, down from previous estimates of 5% to 7% growth.

Starbucks has been a Vestact-recommended stock since February 2013, and over that time it's performed about in line with the S&P 500. That's a decent outcome, albeit not spectacular.