Core Viewpoint - Starbucks has shown a recovery in its China operations, with a 8% year-on-year revenue growth to $790 million in Q3 of FY2025, marking three consecutive quarters of growth. Same-store sales increased by 2%, the first growth in six quarters, indicating a positive trend in customer engagement and spending [1][3]. Group 1: Financial Performance - In Q3 FY2025, Starbucks reported a revenue of $790 million in China, reflecting an 8% year-on-year increase [1]. - Same-store sales saw a 2% increase, marking the first growth in six quarters [1]. - The total number of Starbucks stores in China reached 7,828, with 70 new stores opened and entry into 17 new county-level markets [3]. Group 2: Strategic Initiatives - Starbucks has implemented significant operational adjustments, including product innovation and a focus on non-coffee offerings to cater to a broader consumer base [4][6]. - The introduction of the "True Flavor Sugar-Free" series and collaboration with Disney for themed beverages are part of the product innovation strategy [4]. - A systematic price adjustment was made for non-coffee beverages, with an average price reduction of 5 yuan for large products, while core coffee products remain above 30 yuan [5]. Group 3: Business Development and Partnerships - Starbucks is evaluating over 20 interested institutional partners for a potential sale of a stake in its China business, aiming to retain a significant portion of ownership [3][8]. - The CEO emphasized the importance of finding partners that share Starbucks' vision and values, indicating a strategic approach to future collaborations [8]. - The company is leveraging its strong brand and operational capabilities to attract potential partners, enhancing its market position in China [11]. Group 4: Leadership and Management Changes - The management team at Starbucks has undergone significant changes, with the appointment of Brian Niccol as CEO, who has a track record of crisis management and operational reform [10]. - Niccol's strategy focuses on fundamentally changing the company's approach, including simplifying the menu and restructuring pricing [10]. - The recent operational adjustments in China align with Niccol's vision for revitalizing the brand and enhancing customer experience [10].

Core Viewpoint - Starbucks has reported a recovery in its China operations, with a 8% year-on-year revenue growth to $790 million in Q3 FY2025, marking the third consecutive quarter of growth. Same-store sales increased by 2%, the first rise in six quarters, indicating a positive trend in customer engagement and sales performance [1][2]. Financial Performance - Q3 FY2025 net revenues reached $790 million, up from $733.8 million in Q3 FY2024, reflecting an increase of 8% [2]. - Comparable store sales improved by 2%, a significant turnaround from a decline of 14% in the previous year [2]. - Transaction volume increased by 6%, compared to a 7% decline in the same quarter last year [2]. - The total number of stores in China reached 7,828, with 70 new stores opened and expansion into 17 new county-level markets [2]. Strategic Initiatives - Starbucks is actively evaluating over 20 interested institutional partners for a potential partial sale of its China business, aiming to retain a significant equity stake [3][7]. - The company has implemented a series of operational adjustments, including product innovation and a focus on non-coffee offerings to cater to diverse consumer needs throughout the day [4][5]. - A systematic price adjustment strategy was introduced, reducing prices on non-coffee beverages while maintaining higher price points for core coffee products [6]. Market Positioning - The introduction of customizable drink options has led to an increase in the proportion of customized orders from 15% to 28%, contributing to a 9% rise in average transaction value [6]. - Starbucks is leveraging its established supply chain to minimize risks associated with new product launches, focusing on refreshing existing product lines rather than creating entirely new categories [5][10]. - The company aims to balance maintaining its premium brand image while penetrating the mass market through strategic pricing and product offerings [10]. Leadership and Management Changes - The recent leadership changes, including the appointment of Brian Niccol as CEO, are seen as pivotal for Starbucks' strategic transformation, emphasizing a shift in operational focus and customer experience [8][9]. - Niccol's previous experience in crisis management and operational reform is expected to drive Starbucks' recovery and growth in the competitive Chinese market [9]. Competitive Landscape - Despite the positive performance, Starbucks faces increasing competition from local coffee brands and tea beverage companies, which are appealing to younger consumers seeking value [10]. - The ongoing operational adjustments and potential equity partnerships are part of Starbucks' strategy to enhance its market position and adapt to evolving consumer preferences in China [10].