The company plans to capitalize on its most active market, the United States.
The American multinational chain of coffee shops and roastery reservations, Starbucks Corporation (NASDAQ: SBUX) has released its fourth-quarter 2022 performance report as revenue slightly beat analysts’ expectations. The company said its revenue was $8.71 billion, down from the estimated $8.78 billion based on analyst expectations.
Starbucks continues to be the coffee shop of choice for millions of consumers in the United States and around the world. The company posted 75 cents as earnings per share (EPS), a miss from the consensus estimate of 77 cents.
The company reported net income for the fiscal first quarter of $855.2 million, or 74 cents per share, compared with $815.9 million, or 69 cents per share, a year earlier. By a very good margin, Starbucks posted an impressive growth trend in the United States even as the COVID-19-related outbreak in China, its second-largest market, dragged down its performance.
The company’s interim chief executive, Howard D. Schultz, said the company posted significant growth in the Asian country following the relaxation of its COVID-19 lockdowns. However, he took a wrong turn when the country began to see a resurgence in the number of cases after the measure.
“With the resurgence, lockdowns and mobility restrictions have been renewed in line with China’s strict zero-COVID policy, including in many cities where we operate, significantly reducing traffic in our stores,” Schultz saying adding that the company “anticipates that the current COVID-related uncertainty will continue and repeats the view we shared on our third quarter call and our Investor Day that while our long-term aspirations for China are undiminished, we expect the recovery of our business in the country will be non-linear.”
Starbucks revealed that as many as 1,800 locations in China were on lockdown, a significant reduction from its 6,090 locations in the country.
Starbucks Revenue Forecast
While currently reported Starbucks revenue fell below expectations, the company is optimistic that revenue for the current fiscal year will grow 10-12%. The company is optimistic that its earnings per share will rise 15-20% on the low end.
The company plans to capitalize on its most active market, the United States. By banking on the growing subscribers of its Loyalty Reward program, which surpassed 30.4 million, Starbucks maintained strong support for its revenue.
Starbucks is known for its innovation in driving customer engagement, a move that has seen it secure a partnership with Web 3.0 startup Polygon. As he left the company as chief executive, Schultz teased the announcement in February of an “enduring and transformative new category” that he discovered during his visit to Italy last summer.
For him, the category is best described as alchemy. With cost cutting measures underway, Starbucks is looking to keep up with its growth tracks in the near future. Shares of the company fell 1.77% in the After Hours session to $107.22.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about the real-life applications of blockchain technology and innovations to drive mainstream acceptance and global integration of emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based sites and media. Benjamin Godfrey is a lover of sports and agriculture.
