Starbucks Q3 FY 2016 Earnings Preview: Continued Focus On China, Expansion Of The Single-Serve Segment To Drive Results

by Trefis Team
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Key Trends:

1) Expanding the single-serve segment in China/Asia Pacific (CAP) and Europe

  • Leading market share in the U.S. in premium roast and ground, and single-serve segment.
  • Leveraging its retail store footprint and customer relationships in China to expand its single-serve segment across the CAP region.
  • Partnership with Nestle to sell Starbucks branded Nespresso compatible pods in Starbucks retail markets around the world, starting with Europe.

2) China, the key growth market

  • Starbucks has over 2,000 stores in 100 cities in China, and is adding over 10 new stores every week to leverage the growing middle-class population. It aims at increasing its store count in China to over 3,400 by the end of 2019.
  • A partnership with Tingyi, a Taiwanese drinks maker, will provide Starbucks with over 1 million points of ready-to-drink Frappuccino distribution in China.
  • Scheduled its third roastery opening in China.
  • Focus on accelerating sales of Teavana handcrafted tea beverages.

3) Digital and other innovations

  • Changes to the Starbuck rewards program may adversely affect top-line in Q3.
  • Introduction of true real-time personalization to help with targeted marketing.
  • Mobile Order & Pay continues to be increasingly embraced by customers.
  • Innovation in cold beverages, including iced black coffee, refreshers with coconut water, and product line extensions for Frappuccino and Doubleshot Energy drinks to support revenue growth.
  • Challenging consumer, economic, and geopolitical environment across EMEA may cause a slowdown in the region for the company.

Have more questions on Starbucks? See the links below.


1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Starbucks

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