Starbucks China Q1 revenue jumps 11% as store sales rebound, expansion accelerates 

CHINA – Starbucks China has reported an 11% increase in first-quarter revenue to US$823.4 million for the fiscal quarter ended December, as the coffee chain recorded a rebound in consumer demand and stronger store performance.  

Comparable store sales in the market rose 7%, signalling renewed momentum after several challenging years in China. 

The US-headquartered coffee group said the improved performance was driven by targeted marketing campaigns, expanded delivery services, and product innovation. Chief financial officer Cathy Smith pointed to successful brand collaborations as a key contributor to growth. 

“Our results reflect effective marketing, strong delivery execution, and continued product innovation,” Smith said, highlighting a partnership with the Harry Potter franchise that introduced limited-edition beverages and merchandise during the quarter. 

Starbucks also continued to expand its physical footprint, opening new stores in 13 additional cities. The expansion brought its total store count in China to 8,011 locations, reinforcing the market’s strategic importance to the group’s global growth plans. 

Further growth is expected to be supported by a strategic deal announced in November with Chinese private equity firm Boyu Capital. Under the agreement, Boyu will acquire a 60% stake in Starbucks’ retail operations in China, while Starbucks will retain a 40% holding as well as its brand and intellectual property rights. 

Expected to close in spring 2026, subject to regulatory approvals, the partnership aims to reduce depreciation and operating costs, accelerate store expansion, and enhance supply chain integration. As part of the transaction, Starbucks plans to convert its company-operated China stores into licensed outlets under its international segment. 

Starbucks first entered China in 1999 and played a central role in popularising specialty coffee across the country. However, competition has intensified in recent years, particularly from domestic rival Luckin Coffee, which operates more than 29,000 stores and recently reported quarterly revenue of US$2.2 billion. 

Beyond China, Starbucks is investing heavily in technology as part of a broader effort to drive efficiency and restore growth globally. The company is rolling out AI-powered drive-thru ordering, automated inventory management systems, and virtual assistants to support baristas. 

These initiatives are already delivering early results. Starbucks recently posted its first same-store sales increase in the United States in two years, a key milestone for a market that accounts for roughly 70% of total revenue. 

Chief executive Brian Niccol said technology would remain central to the company’s transformation. He has committed to delivering US$2 billion in cost savings over the next three years, positioning automation and digital tools as critical enablers of long-term performance. 

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