Starbucks is going up again!
According to overseas network reported on February 3, due to rising inflation, supply chain disruption and rising labor costs, the US coffee chain Starbucks announced that it would raise product prices in 2022 to offset soaring costs. Starbucks CEO Kevin Johnson also said that prices are expected to continue to rise in the coming months.
Starbucks announces price increase
is the second price increase in 4 months
It is reported that as the Omicron strain swept the world, covid-19 epidemic restriction measures further increased, which led to the intensification of labor shortage in the market, and Starbucks announced a price rise. This is Starbucks’s second price increase in four months. The first price increase took place in October 2021 for dishes.
John Culver, chief operating officer of Starbucks, said that the price increase of has not had any impact on customer demand .
According to interface news, Starbucks CEO Kevin Johnson said that the company has taken two “pricing actions” in the past four months and is expected to take more actions this year because the salary increase of retail employees and other cost increases will have an impact on net profit. Starbucks expects to continue to raise prices in the coming months to cope with the profit squeeze caused by inflation and labor market problems related to the epidemic .
As of the closing of February 2 local time, Starbucks shares fell 1.04% to US $97.73, with a total market value of US $114.7 billion.
Source: China stock market news
the financial report shows that the cost increases
CEO: salary increase and incentive will reach $1 billion
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Starbucks announced its mixed first quarter results after hours on Tuesday (February 1) local time, as rising costs dragged down profits, but the demand of American coffee stores in the holiday season was strong.
The results showed that Starbucks’ adjusted earnings per share in the first fiscal quarter was 72 cents, and the market expected 80 cents; Revenue increased by 19% to US $8.05 billion, and the market is expected to reach US $7.95 billion; The net profit was $815.9 million, up from $622.2 million in the same period last year.
Starbucks said the cost of its entire supply chain was higher than expected, and more employees took sick leave. These problems also affect the whole industry.
The company said global same store sales rose 13% in the quarter. Despite personnel problems, same store sales in the United States increased by 18% year-on-year and 12% in two years. Outside the United States, Starbucks’ coffee demand weakened, international same store sales fell by 3%, and the market is expected to grow by 3.3%. In China, Starbucks’ second-largest market, same store sales fell 14% in the quarter.
Starbucks did not update its forecast for fiscal year 2022 in its financial report. Last quarter, the company said it expected GAAP earnings per share to fall by 4% and adjusted earnings per share to increase by at least 10%. The company expects global same store sales to grow in high single digits.
In its just released financial report, the company revealed that although it was close to the quarterly sales record, the total profit in the holiday season was less than expected. CEO Kevin Johnson pointed out three main drivers of increased costs in the United States: inflation, employee wages associated with the epidemic, and the cost of hiring and training new workers in a tight labor market. Starbucks is implementing salary increases and other incentives, Kevin Johnson previously said that these measures will reach $1 billion
