Starbucks
Missing that revenue target caused the buyers to run for the hills and the stock sold off by over 5% Friday. This puts the coffee chain into negative territory for the year leaving investors to wonder where the growth will come from. China?
According to Howard Schultz, Starbucks CEO, "Starbucks record Q2 financial and operating performance - including a stunning 18% increase in revenues and a 5% increase in transactions in China - underscores the strength of the Starbucks brand and the resiliency of our global retail and China based businesses. Loyalty, technology and innovation are continuing to fuel our digital flywheel and propel our business forward all around the world," said CEO Howard Schultz.
Now revenue in China grew by 18% in the last quarter. The company has also been ahead of most other retail businesses to realize that the Chinese population is rapidly transitioning to smartphones. Starbucks is on record for predicting and preparing for the mobile order and pay segment to further boost sales. Starbucks is now in 100 cities in China and plans to grow to 3,400 stores by fiscal 2019.
There's no doubt that the brand still attracts a lot of attention abroad, as can be seen from the social media pictures of lines that formed during the opening of South Africa's first outlet today. Even though only two more stores were opened in the U.S., the American segment still remains its largest market and here they managed to grow net revenue by 10%.
This leaves the analyst community in a big debate over whether this decline is a buying opportunity, or if this "Floppuccino" earnings announcement is only the start.