US-based coffee chain Starbucks has reported total net revenues of $8.15bn in the third quarter (Q3) of fiscal year 2022, an increase of 8.7% from $7.49bn in the same period of the prior year.
During the quarter that ended 3 July, the company’s operating income saw a 13% decline to $1.29bn, compared to $1.48bn in Q3 2021.
The net earnings attributable to the company fell by 20.9% to $912.9m, while diluted net earnings per common share dropped by 18.6% to $0.79.
The third quarter’s global comparable store sales grew by 3%, due to a 6% increase in average ticket, which was partially offset by a 3% fall in comparable transactions.
Its comparable store sales in North America grew by 9%, driven by an 8% growth in average ticket and 1% rise in comparable transactions.
The US comparable store sales rose by 9% during the quarter, due to an 8% increase in average ticket, while Starbucks’ international comparable store sales fell by 18%, due to a 15% decline in comparable transactions and 4% drop in average ticket.
The firm saw comparable store sales in China drop by 44%, due to a 43% fall in comparable transactions and 1% drop in average ticket.
During Q3 2022, 318 net new Starbucks stores were opened, with the company ending the period with 34,948 stores globally, of which 51% are company-operated and 49% licensed.
Stores in the US and China formed 61% of the company’s global portfolio, with the US recording 15,650 stores and China having 5,761 stores.
The company’s GAAP operating margin fell by 400 basis points to 15.9%, from 19.9% in the prior year, due to inflationary pressures, investments in labour, which included enhanced store partner wages, and sales deleverage due to Covid-19 restrictions in China. This was partially offset by pricing in North America.
The non-GAAP operating margin fell from 20.4% in Q3 2021 to 16.9% in Q3 2022.
For the three quarters, Starbucks’ total net revenues stood at $23.83bn, an increase of 14% from $20.91bn in 2021.
During the period, operating income grew to $3.42bn, an increase of 1% from $3.38bn in the same three quarters of 2021.
Net earnings attributable to the company dropped by 1.3% to $2.40bn, while diluted net earnings per common share increased by 0.5% to $2.07.
Last month, Starbucks unveiled its new ‘Reinvention plan’, which included five ‘Bold Moves’ to usher in its next chapter.
