Starbucks gave a high profit forecasts for the years 2022-2024 and confirmed growth forecast for 2021. The global coffee chain planning to open more than 20,000 new institutions in the next decade, expanding largely in China and following the changing consumer preferences.
Shares of Starbucks (SBUX), increased by 14.2% yoy (slightly higher than the growth of the S&P 500 index), rose in after-hours trading on Wednesday. This followed the disclosure by Starbucks about their long-term goals and plans for the online event “the investor Day” held twice a year.
Guide Starbucks said it sees improvement in demand (report of the last fourth quarter is also demonstrated) and more rapid recovery in sales than expected.
An international company has maintained its growth forecast of earnings per share for the entire fiscal year 2021 (begins in October 2020, ends in September 2021): in the range of $2.70 to $2,90, compared with $1.17 for EPS in 2020 fin. year.
At the same time, Starbucks expects in 2023 and 2024 fin. years growth rate in earnings per share to range from 10% to 12%. These projections assume a stable exchange rate and that the company will not experience additional disruptions.
Speaking at “investor Day” Starbucks CEO Kevin Johnson said: “We have further streamlined the company and focused our attention on accelerating growth in our two key markets in the United States and China. Coffee remains very large and attractive market that is growing worldwide. We are focused on increasing the share category and we believe that Starbucks have more opportunities than ever for future success.”
The company revealed its ambitious plans to expand the number of coffee shops 20 thousand to 55,000 points by 2030 fin. year, mainly due to continue expansion in China. Currently the company has approximately 33 000 coffee shops around the world.
The company’s strategy for long-term growth will be based on the following changes in the preferences of consumers – help in this would be to use programs with artificial intelligence.
The company said that it intends to build more points for customer service on the machines (similar to MacDrive McDonald’s (MCD)), to close the less profitable coffee shop and open a coffee shop in the “new format”. The leaders of Starbucks said the coffee houses in China will be opened mostly without seats, focusing on sales through digital orders and delivery. In the U.S. Starbucks already covers about 800 coffee shops with low profit to follow these changes.
Against menu – Starbucks plans to double the number of new soft drinks and to expand the use of oat and other plant milk spots around the world after their tests showed good results.
“Depending on how customers react to these new formats in terms of attendance and frequency, we will use our extraordinary data analysis to learn along the way,” said chief operating officer of Starbucks Rose brewer.
Another news environment was the appointment Mellody Hobson Chairman of the Board of Directors of Starbucks after retirement, Myron Ullman.
The Starbucks company also detailed its long-term environmental initiatives and programmes, Reaffirming its promise to halve carbon emissions, water and waste by 2030.