Core Viewpoint - Starbucks' Q3 FY2025 financial report reveals a contrasting performance with "global pressure and recovery in China," highlighting a significant drop in global net profit while showing growth in the Chinese market [3][11]. Financial Performance - Starbucks China reported revenue of $790 million, a year-on-year increase of 8%, while global net profit plummeted by 47.1% to $560 million [3][11]. - Same-store sales in China grew by 2%, marking the first increase in a year and a half, driven by a 6% increase in transaction volume, although the average ticket price decreased by 4% [4][7]. Strategic Adjustments - The growth in same-store sales is attributed to product innovation and marketing activities, including the launch of the "True Taste Sugar-Free" system [7][17]. - Starbucks has implemented price adjustments on non-coffee products, reducing prices by 2-6 yuan, to attract a broader customer base and enhance consumption during off-peak hours [16][17]. Market Competition - The competitive landscape in China's coffee market is intensifying, with local brands like Luckin Coffee and others gaining market share, leading to a decline in Starbucks' market share from 34% in 2019 to 14% in 2024 [12][13]. - Luckin Coffee reported a net revenue of 12.36 billion yuan, a year-on-year increase of 47.1%, and a total of 26,117 stores, significantly outpacing Starbucks [12]. Store Expansion - Starbucks China has expanded its store count to 7,828, with a net increase of 522 stores compared to Q3 FY2024, and opened 70 new stores during the reporting period [8][9]. - New stores have maintained high profitability levels, contributing above-average same-store sales growth [10]. Ownership and Investment Interest - Starbucks has acknowledged interest from over 20 parties regarding potential equity acquisition in its China operations, with a valuation of up to $10 billion [21][22]. - The company aims to retain a significant portion of its equity in China, with any transaction needing to align with its interests [22][23].

Core Viewpoint - Starbucks China has experienced a performance rebound, with Q3 FY2025 showing an 8% year-on-year revenue growth to $790 million and a 2% increase in same-store sales, marking a significant recovery from a previous 14% decline in Q3 FY2024 [1][4]. Group 1: Same-Store Sales and Revenue Growth - Same-store sales in Starbucks China have returned to growth after four consecutive quarters of decline, with a 2% year-on-year increase in the latest quarter [2][4]. - The growth is attributed to a 6% increase in same-store transaction volume, despite a 4% decline in same-store average ticket price [5][6]. - Product innovation, integrated marketing activities, and the expansion of delivery services have been key drivers of this growth [6][8]. Group 2: Market Expansion and Store Strategy - As of Q3 FY2025, Starbucks China has a total of 7,828 stores, with a net increase of 522 stores year-on-year, including 70 new stores in the latest quarter [9][10]. - The company has focused on expanding into lower-tier cities, with 50% of new stores in FY2024 located in third-tier cities and below [10][11]. - Localized strategies, such as introducing region-specific products and culturally themed store designs, have enhanced customer engagement and sales performance in new markets [11][13]. Group 3: Capital Movements and Partnership Strategy - Starbucks China is actively seeking strategic partners, with over 20 potential partners expressing interest in acquiring a stake in the business [14][15]. - The company aims to retain a significant equity stake, potentially around 30%, while looking for partners that share its mission and can operate efficiently in the local market [14][15]. - Notable potential partners include Hillhouse Capital, KKR, and Meituan, all of which have experience in the food and beverage sector [14][15]. Group 4: Competitive Landscape and Challenges - Despite the positive financial results, Starbucks China faces challenges from a competitive market, with local brands aggressively expanding and driving prices down [17][19]. - Competitors like Luckin Coffee and others are rapidly increasing their store counts, intensifying the competition in both lower-tier and higher-tier markets [18][19]. - The company must navigate these pressures while maintaining its brand positioning and adapting to market pricing dynamics [19].