Starbucks (SBUX) Q3 2024 earnings summary

Executive summary

• Q3 FY24 consolidated net revenues were $9.1B, down 1% year-over-year but up 1% in constant currency, with results in line with guidance despite international challenges and unfavorable foreign currency impacts.

• Global comparable store sales declined 3%, with North America down 2% and China down 14%, partially offset by strong performance in Japan.

• Operational improvements, supply chain efficiencies, and product innovation are driving early positive momentum, with efficiency initiatives outpacing expectations.

• Starbucks Rewards membership grew to 33.8M in the U.S. (up 7% year-over-year) and 22M in China, with increased engagement and frequency.

• Store count grew 6% year-over-year to 39,477, with 526 net new stores opened in Q3 and 1,439 net new stores in the first three quarters of 2024.

Financial highlights

• Q3 consolidated revenue was $9.1B, down 1% year-over-year, driven by 8% net new company-operated store growth and offset by a 3% global comp decline.

• Global operating margin contracted by 60–70 basis points to 16.7%, primarily due to increased promotions, wage investments, and deleverage.

• EPS for the quarter was $0.93, down 6% year-over-year, impacted by a cautious consumer environment and higher tax rate.

• Net earnings attributable to Starbucks for Q3 2024 were $1.05B, down from $1.14B in Q3 2023.

• Cash and investments were $3.7B as of June 30, 2024, with net cash from operations for nine months at $4.6B.

Outlook and guidance

• Full year 2024 guidance reaffirmed, with expectations for flat to low single-digit comp growth and revenue, and flat to low single-digit EPS growth.

• Efficiency initiatives are expected to drive $4B in savings over the next four years, supporting margin expansion and reinvestment.

• Global new store growth forecast at ~6%, with U.S. at ~4% and China at ~12%.

• Capital expenditures for FY24 projected at approximately $3B.

• Management expects operational improvements and product innovation to drive future performance.