Corporate Profiles - 2022 - 104

COMPANY OVERVIEW
Starbucks Corp.
S
tarbucks Corp. spent much of 2022 navigating
changes to its executive leadership
team following the April 4 departure
of Kevin Johnson, president and chief executive
officer of the company since 2017.
Howard Schultz, founder and former CEO of
Starbucks, filled the role on an interim basis
until the company completed its search in September
and named Laxman Narasimhan as its
next CEO. Prior to joining Starbucks, Mr. Narasimhan
had been CEO for the Reckitt Benckiser
Group PLC and previously held leadership roles
at PepsiCo, Inc. and McKinsey & Co.
Changes to its leadership did not curb Seattle-based
Starbucks's aggressive investment
strategy, however, as the company announced
in May it would invest $1 billion into store
development and increased pay, training and
expanded benefits for employees. As part of
the investment, 90% of new stores will offer
drive-thru ordering, which combined with mobile
orders accounted for 70% of US sales in
the second quarter.
The company also emphasized its growing
need for improved off-premises order technology
and equipment after its $500 million delivery
business increased 30% in the first half of 2022.
Starbucks sees significant growth potential
Investments in cold beverages, food necessary for growth
for customized cold beverages in the United
States and abroad, Mr. Schultz said, with the
category growing to nearly 75% of the company's
US beverage sales. In particular, Starbucks'
shaken iced espressos have been its
fastest-growing product in US stores since they
launched in 2021, growing 50% year-overyear
and creating new customer visits during
midday and the afternoon.
" Starbucks' unique ability to deliver handcrafted,
customized cold beverages that satisfy
customer desires and different need states while
creating
opportunities
for customers' self-expression
deepens our connection to customers,
sets us apart from any other industry participant
and provides us with a significant ongoing
competitive advantage in the marketplace, " Mr.
Schultz said in an Aug. 3 earnings call.
The company additionally remains focused
on growing food sales, which it described as
a " golden opportunity " in 2021. A record 40%
of customers are adding food to their orders
in 2022, and one-handed foods like breakfast
sandwiches have been a particular point of
emphasis. US stores are on track to sell nearly
300 million sandwiches this year, and sales
grew 19% year-over-year in the third quarter
of 2022.
Not all of Starbuck's sandwiches have found
success, though. The company launched its first
breakfast chicken sandwich in June, but it was
voluntarily pulled from the menu after less than
a week due to quality concerns.
Despite the stumble, Starbucks continues to
explore potential menu expansions like fresh
pastries, portable salads and plant-based items.
" We'll continue to innovate on food -
fresher,
healthier,
innovative,
thoughtfully
crafted food - and food will continue to drive
our ticket as a craveable complement to our
beverages, " said Brady Brewer, chief marketing
officer, at the Sept. 13 Starbucks' investor day.
Net income attributable to Starbucks in the
third quarter ended July 3 was $912.9 million,
equal to 79¢ per share on the common stock,
down 21% from $1.2 billion, or 97¢ per share,
in the prior-year period. Net revenues totaled
$8.2 billion, up 8.7% from $7.5 billion in the
year-ago quarter. CP
Chief executive officer -
Laxman Narasimhan
Starbucks Corp. net earnings
(fiscal years ended in September)
Starbucks Corp. net revenues
(fiscal years ended in September)
Starbucks Corp. share price
per share
$3,599
$928
$4,199
$26,509
$23,518
$29,061
$60
$80
$100
$120
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