To The Moon

$Starbucks(SBUX)$ released the 22 Q2 quarter earnings ended April 3, it rallied by nearly 10%, which was one of the best during this earnings season. Growth and optimistic prospects in North America, has became the most important factor supporting investor sentiment this quarter

​In terms of performance,

• The overall revenue was 7.635 billion US dollars, a year-on-year increase, which was flat in the market expectation consensus;
• Operating profit margin fell to 13.0%, compared with 16.0% a year ago;
• The adjusted EPS is $0.59, and the expected consensus is $0.6.
• Global same-store sales increased by 7% year-on-year, with an expected consensus of 7.51%.
• Among them, North America increased by 12%, with an expected consensus of 8.6%, while other parts of the world was-8%, with an expected consensus of 1.87%; Same-store sales in China-23%, expected to-6.5%.

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On the whole, Starbucks' performance level has roughly returned to the pre-epidemic level, so the calculated same-store sales in the past two years increased by 23.05%, which was lower than the expected 25.3%.

The development of Starbucks in recent ten years, It mainly revolves around the US and China markets. This quarter, the "ice and fire" in these two markets also made investors somewhat embarrassed.

Before the epidemic, the Chinese market was Starbucks' most potential market. However, the epidemic has become a good opportunity to reshuffle, and Starbucks' market share and influence in China's beverage industry have declined. In the past three quarters,Same-store sales in China showed a downward trend, which was reflected in "quantity" and "price".

Among them, users' single ticket consumption has declined for five consecutive quarters, but this definitely represents the "deflation" of China's catering market,It can only reflect the "involution" under the intensified competition in the tea market. The same-store transaction volume also showed a decline in three quarters, which means that consumers' favor for Starbucks is weakening. Although in the past quarter and the ongoing quarter, Starbucks can use "Lockdown" as an excuse for its performance decline. However, even after recovery, if Starbucks does not make substantial changes in its products, the situation of consumers deviating from it will not change.

In contrast, the performance of North America has increased rapidly because of the opening up after the epidemic. On the one hand, people's demand for going out has returned to normal level, and even there is an increase in "retaliatory" demand for going out; On the other hand, Starbucks actively embraces "digital consumption" and increases sales efficiency.

For investors, the return of founder and CEO Howard Schultz to the company is the most important boost to investor confidence. Looking ahead, Schultz said the company will invest in improving stores and adding digital capabilities to take advantage of this demand and continue to grow.

When Schultz talked about Starbucks Web 3.0 strategy,Pointed out the record demand after the pandemic in the United States."Try to imagine thousands of Starbucks stores with greatly improved productivity and efficiency, and after being reconfigured digitally, improve service speed, improve labor management and reduce unit costs in a way that is more suitable for today's customer behavior."

The remarks also eased concerns about mixed earnings, and investor confidence returned.I believe the company's ability to accelerate to the end of the year is optimistic. However, the growth problem facing Starbucks cannot be solved by the market return in one or two quarters.