Starbucks is rolling out a range of new sustainable packaging at its stores in China. (Photo provided to chinadaily.com.cn)
Starbucks' China revenue grew 51 percent from the previous year to $821.9 million (5.8 billion yuan), or up 60 percent when excluding a 9 percent impact of foreign currency translation in the third quarter of its 2023 fiscal year, according to the company.
In the Chinese market, the company's change in comparable store sales increased 46 percent and the change in transactions grew 48 percent in Q3 which ended on July 2 this year.
In China, Starbucks hit the highest number of 90-day active users the company has ever had, with over 20 million Starbucks Rewards customers, said Chief Executive Officer &Director of Starbucks Corp Laxman Narasimhan during Q3 2023 Earnings Call.
"We plan to make significant investments in China to further enhance our digital capabilities in the market," Narasimhan said.
China business continued to recover in-line with expectations and it is clear the company has abundant opportunity ahead, said Chief Financial Officer and Executive Vice-President of Starbucks Corp Rachel Ruggeri.
Starbucks' Q3 consolidated revenue reached a record $9.2 billion, up 12 percent from the previous year, or up 14 percent when excluding more than 1 percent impact of foreign currency translation.
The company's revenue growth reflects double-digit growth in all major markets including China.
The growth is attributable to a 24 percent increase in comparable store sales, which was driven by 21 percent transaction growth as customers continued returning to the stores, largely in China.
The company's International segment delivered 11 percent net new company-operated store growth year-on-year with China contributing a significant portion of store growth.
China had a strong quarter, delivering the highest beverage sales for Q3 over the last five years, underpinned by comparable store sales growth of 46 percent in Q3.
Average weekly sales in China grew quarter-over-quarter and the company expects this to continue into Q4.
With the current demand, and the long-term opportunity in China, Starbucks will continue to invest in stores, partners, and communities, and have the largest roasting plant outside of the US, the Coffee Innovation Park, opening this fall, Ruggeri said.
Starbucks entered into the Chinese market 24 years ago and it has since opened 6,480 stores in China.
Starbucks Corporation's common stock closed at $102.13 up 0.86 percent with a volume of 14,465,181 on Aug 2, according to nasdaq.com.