On May 1st, Starbucks released its financial report showing that its revenue for the second quarter of the 2024 fiscal year was $8.56 billion, a year-on-year decrease of 2%; The net profit was 770 million US dollars, a year-on-year decrease of 15%. Starbucks achieved a revenue of $17.99 billion in the first half of 2024, a year-on-year increase of 3%; Net profit of 1.8 billion US dollars, a slight increase of 2%.
According to Starbucks CFO Rachel Ruggeri, Starbucks has adjusted its global revenue growth forecast for the full year of 2024 from the previous 7% to 10% to a lower single digit growth. Starbucks also expects continuous revenue growth from the third to fourth quarters of 2024, and with the company's action plan taking effect, the profit margin and profit pressure for the fourth quarter will be alleviated.
In the second quarter of fiscal year 2024, Starbucks opened a net of 364 new stores, with a total of 38951 global stores, an increase of 6% from the previous year. Among them, 52% are directly operated stores and 48% are franchised. The United States and China together account for 61% of Starbucks' global stores, with 16600 and 7093 stores in the United States and China, respectively.
In the second quarter of fiscal year 2024, Starbucks' strategy to expand into the lower tier market in China is still ongoing. The vast county market in China provides great room for imagination for Starbucks to grow its performance.
Starbucks CEO Nasihan said that in this quarter, Starbucks China's breakfast time performance was strong, with sales greater than before the epidemic, and sales of exclusive Starbucks same store delivery achieved growth. "We will continue to implement the three key elements of China's strategy, providing more locally related innovative coffee products; increasing major technological investment, improving omnichannel capabilities, and digitizing stores; considering the strong economic benefits of new stores in the sinking market, we will further expand new stores in the sinking market, especially in new county-level cities."
In the second quarter of fiscal year 2024, Starbucks net added 118 stores in China, a year-on-year increase of 14%, entering 20 new cities and covering nearly 900 county-level cities. The 90 day active member scale in the sinking market has grown rapidly, with member growth rates exceeding those in high tier cities. Membership sales have grown significantly, with a sales growth rate twice that of high tier cities.
In addition, Starbucks is accelerating its beverage innovation in the Chinese market. Starbucks China has launched a total of 27 new products this quarter, twice the quantity of the previous quarter and three times the same period last year.
Although Starbucks is delving deeper into the sinking market, it is not interested in the price wars that other brands are passionate about.
Starbucks founder Howard Schultz previously stated in an interview that Starbucks is not engaged in a discount or price war. Starbucks' business is community based, using coffee to create cultural connections. Competition is making millions of people aware of coffee, and over time, as customers become more familiar with coffee, they will want to upgrade from low-end or discounted products. But as long as we continue to earn market respect, they will choose to upgrade to Starbucks.
There is still a lot of room for growth in China's coffee market. According to Zhuo Shi Consulting, it is expected that the scale of China's freshly made coffee market will maintain a CAGR growth rate of 21.2% from 2022 to 2028, making it the fastest-growing sub category in the Chinese freshly made beverage market. The 2023 China Urban Coffee Development Report shows that as an emerging force in coffee consumption, China's coffee industry has a compound growth rate of 12.5%, with enormous development potential.