Starbucks is buying out the remaining 50% share of its East China business from its joint venture partners for approximately $1.3 billion, marking the company’s biggest-ever acquisition and giving it 100% ownership of nearly 1,300 stores in the region. The acquisition aligns with the coffee giant’s target of operating 5,000 stores in China by 2021.
The move coincides with the retailer’s Q3 earnings announcement, which reported:
$5.66 billion in revenue, an 8% increase;
$0.47 in adjusted earnings per share, down 8.9%; and
Its highest U.S. same-store sales increase (5%) in five quarters.
Same store sales in China increased 7%, but same store sales in the China/APAC region as a whole only increased 1%, well below Wall Street forecasts of 4.3% growth. With the 2,800 Chinese Starbucks locations clearly buoying the results of the entire region, it makes sense for the coffee brand to up its investment in the country. In Q3, Starbucks opened 250 stores in the China/APAC region, marking it as the region with the most net new stores.
Shanghai alone has nearly 600 Starbucks outlets, the largest number in any city. It will also be the first city outside…