US coffee giant Starbucks reported that its total net revenues increased 11 per cent to US$3.8 billion for the quarter to December 30.

Net revenues for the China/Asia Pacific were up 28 per cent to US$214.1 million. The increase was primarily due to incremental revenues from 166 net new company-operated store openings over the past 12 months and an 11 per cent increase in comparable store sales. Licensed store revenue growth of 14 per cent also contributed to the revenue growth for the region.

Operating income increased 26 per cent to US$72.1 million while operating margin decreased 60 basis points to 33.7 per cent due to investment spending to support continued growth in China and a shift in the composition of store portfolio from licensed to company-operated stores.

“Solid growth in our US retail business, further expansion of our channel development initiatives and continued successful execution against our expansion plans throughout China and Asia Pacific all contributed to the record results,” said CEO and president Howard Schultz.

Starbucks’ net revenues in the US grew 10 per cent to US$2.8 billion, attributed to the seven per cent increase in comparable store sales.

In the EMEA region, net revenues rose only one per cent to US$306.1 million due to the decline in company-operated revenue as a result of recent store portfolio optimisation activities including the sale of the Ireland store portfolio and UK airport locations to licensed partners as well as the closure of underperforming stores in the UK.

During the period, Starbucks opened a total of 212 new stores globally, including the first three stores in India.

This year, the coffee giant targets to open approximately 600 new stores in China/Asia Pacific, with licensed stores comprising approximately half of the new additions. Slightly more than half of the new stores will be in China.

Early next month Starbucks will open its first cafe in Vietnam through partnership with Maxim’s Group.

GB