Starbucks Reports Record Revenue, Driven Mostly by Gen Z’s Love of Iced Drinks
Customers flocked to Starbucks to order a Pineapple Passionfruit Refresher and an Iced Shaken Espresso, driving the coffee giant’s revenue to a record $8.2 billion in the latest quarter, the company said Tuesday.
McDonald’s and other restaurants and food companies that have reported earnings over the past few weeks say they are starting to see customers spending less or cutting menu prices, but Starbucks executives Customers, specifically the Generation Z cohort — showed no immediate signs of reducing their consumption of iced cinnamon dolce lattes.
According to Starbucks founder and interim CEO Howard Schultz, cold drinks, which accounted for 75% of beverage sales in the fourth quarter, are popular with Gen Z. on social media.
“We are in the early days of cold drinks in modification and customization, which gives us a competitive edge,” Schultz said. And as more employees returned to the office and grabbed their morning coffee on the way, he predicted continued profitability.
Still, rising costs related to rising commodity prices and wages, as well as Covid-related shutdowns and restrictions in China, will dampen Starbucks’ overall earnings. It decreased 13 percent to $1.3 billion from $1.5 billion in the year-ago quarter.
Schultz, who took over Starbucks for the third time in April, most recently told Kevin Johnson that he spent much of the past four months visiting Starbucks stores around the world and meeting with employees. . These meetings helped shape what the company saw as a “reinvention” of his July.
Schultz also said the company is interviewing potential candidates for the CEO position, and that the candidate can stay “as long as necessary” to ensure a seamless start. He later said he would move to the board to “lead and help” the incoming chief executive.
