Starbucks CEO targets growth in China after years of slowdowns from Covid restrictions

Starbucks CEO Laxman Narasimhan spoke with CNBC’s Jim Cramer on Thursday after the espresso large reported earnings for its fourth quarter that beat Wall Street expectations. Narasimhan mentioned the corporate’s plans to expand its shops in China, its second-largest market.

“We’ve solely mentioned that we’d develop to 9,000 by the top of ’25, and I’ll inform you this, that’s only a milestone,” Narasimhan mentioned.

The firm noticed headwinds in China over the previous few years, with enterprise stalled because of the nation’s extended zero-Covid coverage. This quarter noticed China’s same-store gross sales develop 5% and buyer site visitors improve 8%, though the common ticket declined 3%.

After 24 years of enterprise in China, Narasimhan mentioned per capita espresso consumption lies at 12 cups per particular person. In the U.S., that quantity sits at 380 and in Japan, 280, he added. Narasimhan additionally mentioned Starbucks is seeing robust enterprise and growth alternatives in Shanghai, with greater than 1,000 shops in town and per capita consumption between 100 cups and 150 cups.

Starbucks’ fourth-quarter income was $9.37 billion, in comparison with $9.29 billion anticipated by LSEG, previously often called Refinitiv, and its earnings per share got here in at $1.06, topping estimates of 97 cents. Shares of the corporate closed up about 9.5% Thursday.

Starbucks CEO Laxman Narasimhan talks Q4 earnings with Jim Cramer

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