Starbucks' Chinese Footprint Resembles a Coiled Spring
Since the beginning of 2019, Starbucks' Chinese footprint has grown from 3,685 to 5,654 stores (+35%) $SBUX. As ugly a picture the lockdowns paint on revenues, the bull case would imply this is a tightly wound spring, ready to pop when things are "normal".
In the second quarter of 2022, Chinese revenue fell 14% YoY, with average ticket down 4% and the volume of transactions down 20%, leading to a 23% decline in comparable-store sales. The recent zero-covid policy of China, and nationwide lockdowns, is clearly hurting Starbucks.
Below is a visualization from 2018 (the furthest back China data goes). The China business is likely to look ugly for a little while with 1/3 of stores closed in Q2. After resurgance in 2021, the segment is now plagued by mobility once more in 2022
*Q2'22 revenue is TTM
But Howard Schultz states that he remains "convinced Starbucks' business in China will be eventually larger than our business in the U.S."
Definitely makes sense. Hopefully this spring gets the chance to pop for us shareholders