Starbucks’ mixed Q1 results impacted by inflation and labor costsStarbucks’ mixed Q1 results impacted by inflation and labor costs

Joanna Fantozzi

Starbucks reported mixed results on Tuesday for the first quarter of 2022 ended on Jan. 2, with U.S. same-store sales up 18% and global same-store sales up 13%. But despite strong demand during the company’s usually busy holiday season, Starbucks’ income growth was slower than expected which may have been due to outside factors like inflation and COVID-19-related labor costs, according to CEO Kevin Johnson.

“As we enter the third year of this pandemic, our stores continue to play an important role as a community gathering place that offers safe, familiar and convenient experiences for our customers,” Johnson said in a press statement accompanying the company’s earnings release. “Although demand was strong, this pandemic has not been linear, and the macro environment remains dynamic as we experienced higher-than-expected inflationary pressures, increased costs due to Omicron and a tight labor market.”

As Starbucks recovers from previous pandemic-slowed quarters, financials may be uneven. Even as they move generally upward. U.S. same-store sales growth was driven by an increase in comparable transactions and a 6% increase in average ticket. Starbucks net revenues grew 19% year-over-year to $8.1 billion, driven by the same-store sales jump, especially as compared with COVID-19-related challenges during the first quarter of last year.

Starbucks reported quarterly net income of $815.9 million, or 69 cents per share, up from $622.2 million, or 53 cents per share, the same quarter the year prior.

The company also continues to grow its physical and digital footprint, with 4% net unit growth of 484 new stores opened globally over the past quarter, and loyalty program members up 21% year over year.

“Starbucks will continue to proactively address the industry challenges and operating environment while maintaining our focus on Starbucks partners and customers,” Johnson said in a statement. “Our brand is more resilient than ever as we navigate the future of Starbucks together.”

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