Starbucks said Tuesday it saw no slowdown in consumer spending even as customers cope with rising costs.
Starbucks opened 318 stores globally in the quarter ending July 3 despite closing 16 stores in the U.S., including six in the Puget Sound area. On June 3, the company said it opened stores in Shanghai — the company’s largest China market with 940 stores — that had been closed because of the country’s “zero-COVID” policy.
The coffee giant reported revenues of $8.15 billion, beating Wall Street estimates of $8.13 billion, despite the slowdown in the company’s China business. Starbucks said previously that it expects much of its future growth to happen in China.
The company’s business in China decreased 44%, a deeper decline than the estimated 39%, in the quarter ended July 3, according to its earnings report filed with the U.S. Securities and Exchange Commission.
Starbucks interim CEO Howard Schultz said the results serve as an early progress report on the company’s strategies during the four months since he took over as CEO. Schultz returned to the company for his third stint as CEO as workers across the U.S. petitioned to be represented by unions affiliated with Workers United.
Schultz has said the company is implementing a reinvention plan for the company. At a New York Times panel last month, Schultz said that he does not see a role for unions in the plan, which he said today is helping Starbucks lower attrition and retain workers.
He also said store closures announced last month won’t affect the plan rollout. “We don’t anticipate store closures will be material in any way,” Schultz said.
As Schultz prepares to leave in early 2023 after a new CEO is selected, he told investors that there will be no risk in changes to Starbucks’ reinvention plan with new leadership.
“We’ve narrowed it down to a select few,” Schultz said. “I’ve committed myself to stay as long as necessary to ensure the fact that the new CEO has a soft landing in the company, that we have a long immersion process and then I transition to the board.”
Price per share rose in after-hour trading.