Starbucks 3Q22 Commentary

Aug 10, 2022 | Bubble Monitor, No Bull Economics


Executive Summary: Starbucks reported a strong +9% increase in same-store sales for the quarter, including an +8% increase in average ticket (which reached an all-time high) and corporate reported no measurable reduction in customer spending or trade-down. Menu prices increased +5% over the last 12 months although traffic is down double-digits since 2019 levels which reflects that people are no longer going into the office every day. In any case, corporate expects the morning daypart to come “roaring back”.

Quarterly results were driven by huge growth in cold beverages (a favorite of Gen Z) and a +19% increase in food sales. Cold beverages now account for 75% of total beverage sales in U.S. company stores and its Iced Espresso platform grew +50% y/y, creating new customer occasions in the midday & afternoon dayparts. Gen Z is choosing modifiers to add to their beverages which are raising the ticket while producing color & excitement which they are highlighting on social media.

Notably, Wendy’s recently indicated that more people are either working from home or eating at the house and then grabbing a beverage on the way to the office. This is helping C-store beverage sales & business for the traditional coffee houses. 

Active Starbucks Rewards membership grew +13% y/y to 27.4MM members & loyal Starbucks Rewards members drove a record 53% of U.S. company store revenue. Mobile Order & Pay, drive-through, and delivery drove 72% of total U.S. revenue.

Starbucks Financials Graph

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