Starbucks isn't giving up on its China dream

Core Insights - Starbucks is actively seeking a local partner to manage its stores in China, which is its second-largest market after the US, due to recent sales stagnation [1][2] - The company is evaluating 20 interested parties for this partnership, aiming to enhance the brand's future prospects in China [2] Financial Performance - In the third quarter of 2025, Starbucks reported its sixth consecutive quarter of sales declines, with global same-store sales down 2% year-over-year [3] - However, the company experienced an 8% increase in net revenue in China and a 2% increase in same-store sales during the same period [3] - Compared to previous quarters, the performance in China showed improvement, with same-store sales flat in Q2 and a 6% decline in Q1 [4] Market Dynamics - Starbucks opened 522 new stores in China over the past year, marking a 7% increase in its retail footprint [4] - The company faces challenges from local competitors like Luckin Coffee, which have gained market share by offering similar products at lower prices [9] - Despite these challenges, the CEO remains optimistic about the growth potential in the Chinese market, indicating plans for large-scale expansion [9] Stock Performance - Following the earnings announcement, Starbucks' stock rose nearly 5% in after-hours trading [10]