Starbucks stock surged Wednesday after the company boosted its profits forecast and promised to investing $3 billion in new technology and retail renovations.
Starbucks predicts earnings to rise 15% to 20% over the next three years, up from 10% to 12% before.
Starbucks predicted global sales should rise 7% to 9% in 2023, citing China's post-Covid resurgence. Starbucks forecasts 7-9% U.S. sales growth.
CFO Rachel Ruggeri said the new outlook is 3% higher. The business plans to open 2,000 U.S. stores and 4,500 in China by 2025.
Starbucks will develop value for partners, consumers, and shareholders by making smart investments, reducing expenditures, and expanding profits.
Starbucks climbed 5.3% at $92.50 Wednesday.
Starbucks will invest $2.5 billion to $3 billion over the next three years to renovate stores and add new technology to manage the growth in digital orders, which account for a quarter of revenues.
Starbucks invested after 236 U.S. stores joined unions in the past year.
Starbucks raised its hourly wage to $17 this summer, including raises for experienced but not union staff.
Starbucks will pay $20 billion in dividends and buybacks next year.
Rising ingredient prices and larger pay packages cut Starbuck's second-quarter margins by 400 basis points to 15.9%. Starbucks' June quarter sales was $8.15 billion and 84 cents per share.