With worst over, Starbucks plans 20,000 more cafés
The notion of a Starbucks Corp. on every corner is back, with the chain planning to build more than 20,000 additional locations in the next decade after it has left the pandemic in its wake.
That goal of reaching 55,000 locations by fiscal 2030, up from nearly 33,000 today, was one of several targets laid out by the world's biggest coffee chain at its investor day this week. Also on the agenda: a boosted sales outlook, expanding margins and a long-awaited oat milk rollout across the United States.
Starbucks sees “a long runway of healthy growth ahead,” CEO Kevin Johnson said. “We are well positioned to invest in the right areas to strengthen our competitive advantage and drive consistent, sustainable growth for decades ....”
The chain — whose business was clobbered by the COVID-19 pandemic — now sees things improving faster than expected. Starting in fiscal 2023, Starbucks predicts annual comparable-store sales growth of four per cent to five per cent in the U.S. and globally, and growth of two per cent to four per cent in China, beating its previous forecasts. It also raised its operat
ing margin outlook.
The boosted outlook comes after Starbucks accelerated a shift to more delivery and drive-thru locations earlier this year. While it has lagged rivals like Mcdonald's Corp. in its recovery, with breakfast a more disrupted meal during lockdowns than lunch or dinner, it signalled the worst had past in October when it reported global samestore sales that were inching back toward normal.
Starbucks shares are up more than 14 per cent this year, about in line with the S&P 500. They rose nearly five per cent at the close Thursday in New York.
The expansion in new Starbucks stores will be partly driven in mainland China, where it expects to open around 600 new stores over the next 12 months.
One in 10 will be Starbucks NOW stores, a to-go format with an emphasis on speedy digital payments intended to accommodate pickups for delivery riders. In the U.S., the company expects net new store growth of about three per cent starting in fiscal 2022, the lower end of its previous target.
Investments in new store formats and digital capabilities are expected to drive financial performance, the company said. Starbucks expects adjusted earnings growth of at least 20 per cent in fiscal 2022. For fiscal 2023 and fiscal 2024, that growth will be as high as 12 per cent. Starbucks said its Rewards members now drive almost half of revenue.
Responding to the craze for plantbased milks that has caused oat prices to surge, the Seattle-based firm will roll out oat milk at its U.S. stores starting in the spring.