Starbucks today announced record-breaking Q4 FY21 earnings results, sharing insights into the company’s performance and as well as outlining steps being taken to position the company for continued growth into the future.
“Our strong finish to fiscal 2021, including record performance in the fourth quarter, demonstrates the resilience of Starbucks and reinforces the value of the bold strategic moves we have taken over the past two years. Through it all, we have thoughtfully navigated a strong recovery with an eye towards our future, all guided by our Mission and Values,” said Kevin Johnson, president and ceo.
“Today we announce we will be doubling-down on our investments in our partners, the heartbeat of our company. We know that when we exceed the expectations of our people, they in turn exceed the expectations of our customers – which creates value for all of our stakeholders – our partners, our customers, our communities and our shareholders. We anticipate that our strong business momentum, increased operating efficiency and continued global store expansion will fund these unprecedented investments while delivering yet another year of significant growth,” concluded Johnson.
Full details on Starbucks financial results can be found here.
Starbuck is Investing in Partners: Yesterday, Starbucks announced a historic investment in its store partners, building on the company’s belief that success is best when shared and is good for business over the long term. As part of the announcement, the company shared that effective in January 2022, retail partners with two or more years of service could receive up to a 5% raise while retail partners with five or more years could receive up to a 10% raise. Additionally, in Summer 2022, average pay for all U.S. hourly retail partners will be nearly $17/hr., with baristas hourly rates to range based on market and tenure from $15 to $23/ hr. across the country. To continue to build a great and enduring company and strengthen the global brand, Starbucks continues to invest ahead of the growth curve. Not just in wages, but in training and technology, and the overall Starbucks Experience for both partners and customers.
Company’s “Growth at Scale” Agenda Drives Continued Recovery: Starbucks recovery in the U.S. continued with the company reporting sequential improvement of two-year comp growth to 11%, with comps accelerating throughout the quarter and marking the second quarter of double digit two-year comps in the U.S. Starbucks momentum in the U.S. continues to be fueled by its “Growth at Scale” agenda, which focuses on elevating the customer experience, beverage innovation and digital customer engagement – a strategy that continues to pay off for the company.
Globally, the company reported that Q4 comparable store sales were up 17%, driven by a 15% increase in comparable transactions and a 2% increase in average ticket. The company extended its market leadership position in China, and while pandemic related disruptions in Q4 affected the majority of stores at its peak and impacted recovery momentum, Starbucks China grew revenue 11% year-over-year.
Company Deepens Digital Engagement Globally: Starbucks continues to build and leverage its technology-first, mobile and digital capabilities and accelerate growth in active membership in the Starbucks Rewards loyalty program, fueling the company for the long-term. In China, 90-day active Starbucks Rewards members grew to a record 17.9M, while in the U.S. reported a 90-day active member base of nearly 25M, up 28% versus the prior year. In the U.S., Starbucks Rewards members drove 51% of company-operated sales.
Cultivating direct digital relationships with customers continues to be a focus for the company and Starbucks Rewards program enhancements such as ‘Stars for Everyone’ are helping expand reach. The company also alluded to future enhancements designed to provide personalized experiences while the company looks to remain at the forefront of disruptive innovation in loyalty that will unfold over the next few years.
Focus on Elevated Customer Experiences Continues: As consumer mobility increases, Starbucks continues to adapt to stay ahead of evolving customer trends. The company outlined a rich pipeline of innovation to elevate the Starbucks Experience in retail stores and drive convenience for partners and customers, including the roll-out of the new Mastrena II espresso machines that more efficiently pulls triple-shots of high-quality espresso; Deep Brew artificial intelligence platform that has automated daily inventory management; and store staffing and training improvements designed to reduce complexity in stores.
Additionally, the company shared that it has repositioned 500 stores in the U.S., as planned, to better locations with more favorable economics, while expanding its portfolio of convenience formats to meet customer needs. In China, Starbucks expanded its store footprint, opening 225 net new stores in the quarter, and now boasts 5,360 stores in 208 cities in the country. In FY21, Starbucks opened approximately 1,200 net new stores, ending the fiscal year with a record 33,833 stores globally.
Company Sees Positive Signs Globally: With more than 33,000 stores in 84 markets, Starbucks is able to provide a unique perspective on the global recovery from the pandemic. The company reported continued recovery globally where Latin America grew system sales by 113% in Q4 driven by a strong recovery in Mexico, EMEA posted system sales growth of 52% in the quarter and Japan navigated through a challenging quarter turning the corner towards renewed growth. Starbucks sees positive signs in many other markets as well, reinforcing the company’s belief that pandemic-related headwinds are temporary.
In addition, Starbucks strategic channel partnerships with the North American Coffee Partnership with PepsiCo and the Global Coffee Alliance with Nestle remain on-plan, and have propelled Starbucks to number one share positions in the U.S. and throughout many other markets around the world, further underscoring the strength and resilience of the Starbucks brand and illuminating the decades long runway of growth ahead.
A Preview of What’s Ahead: Starbucks is entering fiscal 2022 with strong customer demand and solid momentum in our U.S. business, an expanding and accelerating in-store, channels and digital flywheel, and green apron partners eager to deliver an elevated Starbucks Experience to their customers.
Today, Starbucks also introduced guidance for fiscal 2022 including:
- Expected global comparable sales growth in the high-single digits
- Approximately 2,000 net new store openings globally
- Consolidated revenue between $32.5 billion and $33 billion
As Starbucks enters the new fiscal year, the company is gearing up for a record-breaking holiday, with strong growth planned around the world and a holiday campaign designed to build genuine human connection as only Starbucks can at a time when human connection is more important than ever.