The company announced its plans after it released its fourth quarter earnings yesterday.
Starbucks chief executive Kevin Johnson said the company has a clear growth agenda for 2019 with a focus on long-term growth markets in the US and China, the coffee chain’s biggest markets.
Last May, the Seattle-based company announced it plans to open 3000 stores in mainland China over the next few years and wants to almost double its number to 6000 before the end of 2022.
“In the fourth quarter, Starbucks delivered improved sequential results in both our Americas and China/Asia Pacific segments,” said Scott Maw, Starbucks’ chief financial officer.
“We also further set the stage for increased benefits from our ongoing efforts to streamline the company.”
Maw said each of these factors have contributed to record fourth quarter results and positioned the company well for fiscal 2019 and beyond.
Starbucks reported its sales at stores in the US grew four per cent during the fourth quarter period, breaking it out of its slump. According to Johnson, it was the company’s strongest same store sales growth in the country in five quarters.
The Seattle-based coffee chain’s growth in the US helped boost its revenue to $6.3 billion, a 10.6 per cent increase from the $5.7 billion in the previous corresponding period. The company’s European growth was fairly sluggish at 2 per cent comparable growth.
The company said it is expecting a consolidated revenue growth of five per cent to seven per cent.
Neil Saunders, managing director of GlobalData Retail, said Starbucks’ same store sales growth in the US was its best outcome in over a year.
“It is evident that the healthy consumer economy has stimulated higher spend on small treats and indulgences – including coffee and snacks,” Saunders said. “This has encouraged existing customers to trade up or to buy more while in store.”
Saunders said the ongoing remodeling and refurbishment of Starbucks stores are also contributing to its growth, encouraging more consumers to linger for longer adding that this, in turn, stimulates them into spending more, including on food items.
“Overall, we are pleased with Starbucks performance,” Saunders said.
“We maintain our concerns about the maturity of the US market over the longer term. However, with a strong holiday offering and some growth from the CPG side, the business is doing enough to keep itself moving forward for now.”
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