As the world prepares to distribute coronavirus vaccines, Starbucks is projecting a strong rebound to demand for its coffee by 2022.
CFO Pat Grismer reiterated the company's fiscal 2021 forecast of adjusted earnings per share of $2.70 to $2.90 at the company's biennial investor day. By fiscal 2022, which will start in October, the coffee chain is forecasting growth of more than 20% as it laps weaker earnings growth.
In 2023 and 2024, Starbucks expects to hit long-term growth targets, with adjusted earnings per share growth of 10% to 12%.
Shares of Starbucks rose more than 4% in extended trading on the news. The stock, which has a market value of $122 billion, has risen 18% so far this year.
Grismer also told investors that Starbucks is slightly raising its forecast for ongoing long-term revenue growth to a range of 8% to 10%. At its last investor meeting in 2018, the company said it expected adjusted earnings per share to rise at least 10% annually and consolidated revenue growth of 7% to 9% over the long term.
Executives also shared more details on the company's strategy for long-term growth, including using artificial intelligence in its drive-thru lanes and doubling down on new cold drinks. In its home market, Starbucks is accelerating changes to its footprint, closing about 800 underperforming locations and building new store formats, like urban cafes without seating and more drive-thru lanes in the suburbs.
"Based on how customers respond to these new formats, in terms of visitation and frequency, we'll harness our extraordinary data analytics to learn as we go," COO Roz Brewer said.
Long-term, Starbucks is projecting net new unit growth of 6% worldwide as it strives to reach 55,000 cafes globally by 2030. It's expecting about 3% new unit growth in the United States, down slightly from its prior range of 3% to 4%. In China, its second-largest market, it's forecasting new location growth in the low teens, down from its prior outlook in the mid-teens.
Adding more locations will help the global coffee giant reach new customers as it predicts that the global addressable market for coffee will reach $450 billion by 2023. Currently, it has a store footprint of nearly 33,000.
The projections assume that Starbucks will not experience any additional business interruptions and stable foreign exchange rates.
The company also announced Wednesday that Mellody Hobson, co-CEO of Ariel Investments, would take over as chair of its board following the retirement of Myron Ullman.