Starbucks says customer spending trends are still strong
Scott Olson

Starbucks Corporation (NASDAQ:SBUX) execs said on the company's earnings call that the coffee store operator expects margins and earnings to be lower sequentially in FQ4 due in part to a late comeback in mobility in China and a negative impact from a sequential step-up in investments.
In a positive update, SBUX said it sees no measurable reduction in consumer spending or trading down despite the inflation and other macro pressures. Demand in the U.S. was noted to have accelerated in FQ3 on a sequential basis.
Crucially, SBUX is still confident on the upside in China.
"We remain highly confident in the resilience and dynamism of the Chinese consumer economy. China's coffee market is still in its very early stages, and we have a long runway for growth ahead," noted Chief Financial Officer Rachel Ruggeri.
On Wall Street, Jefferies analyst Andy Barish said green shoots of recovery in Starbucksâ China demand is already being seen and pointed to the September investor day as a key catalyst for long-term growth.
Cowen analyst Andrew Charles also has the September investor day circled as a noteworthy event.
"We expect shares to remain subdued in the near term as the company paves the way for a new CEO hire later in 2022 & investors can gain more confidence in 2023-24E. We expect margin clarity at the investor day to be a key catalyst for shares."
Shares of SBUX rose 1.71% in premarket trading on Tuesday to $85.14.
Dig into the Starbucks (SBUX) earnings call transcript.