Key Financial Highlights:

- Consolidated net revenues rose 11% to a record $9.4 billion, or 12% excluding a 1% unfavorable impact from foreign currency translation.

- GAAP operating margin increased to 18.2% from 14.2% in the prior year, primarily due to in-store operational efficiencies, sales leverage, and pricing.

- Non-GAAP operating margin increased to 18.2% from 15.1% in the prior year.

- GAAP earnings per share grew 39% over the prior year, while non-GAAP earnings per share grew 31% year-over-year.

Starbucks Corporation, a global coffeehouse chain, reported its Q4 Fiscal 2023 earnings, exceeding expectations. The company's performance was driven by strong comparable store sales growth, particularly in North America and China. Starbucks also provided guidance for its fiscal year 2024, which indicates sustained momentum and growth.

Starbucks achieved a record consolidated net revenue of $9.4 billion in Q4, representing an 11% increase compared to the previous year, exceeding analyst expectations. Excluding a 1% unfavorable impact from foreign currency translation, net revenues grew by 12%. The company's GAAP operating margin improved to 18.2% from 14.2% in the prior year, benefiting from in-store operational efficiencies, sales leverage, and pricing. Non-GAAP operating margin also increased to 18.2% from 15.1% in the previous year.

Starbucks reported GAAP earnings of $1.06 per share, a 39% growth over the prior year. Non-GAAP earnings per share also increased by 31% to $1.06 compared to the previous year, both better than expected.

Global comparable store sales increased by 8%, driven by a 4% increase in average ticket and a 3% increase in comparable transactions. This growth was driven by strong performance in North America, with an 8% increase in comparable store sales, and continued momentum in China, where the company opened 326 net new 'purpose-driven' stores, a 13% increase year-over-year.

International comparable store sales increased by 5%, primarily due to a 6% growth in comparable transactions and a 1% decline in average ticket. Notably, China experienced significant momentum, with comparable store sales growing by 5%, driven by an 8% increase in comparable transactions despite a 3% decline in average ticket.

Starbucks Rewards, the company's loyalty program in the U.S., experienced growth, reaching 32.6 million 90-day active members, a 14% increase year-over-year.

The company's Reinvention Plan, aimed at improving the customer and partner experiences, has been a key driver of its success. This plan has resulted in operational efficiencies, sales leverage, and margin expansion. Starbucks also saw a 14% increase in the number of 90-day active members in its Starbucks Rewards loyalty program in the U.S., highlighting the success of the program in engaging customers.

Looking ahead to fiscal year 2024, Starbucks provided guidance for global comparable store sales growth of 5-7%, with U.S. comparable store sales expected to increase by 5-7% and China's comparable store sales anticipated to grow by 4-6% until Q2.

Starbucks aims for revenue growth in the range of 10-12%, implying a range of $39.6-40.3 billion, slightly below the estimated $39.7 billion. The company also maintains its expectations for earnings per share growth of 15-20%, implying a range of $4.07-4.25, compared to the estimated $4.06.

The company plans to continue its global new store growth with an expected increase of 7%, while U.S. store count is projected to rise by 4% and China store count by 13%.

Starbucks CEO, Laxman Narasimhan, expressed confidence in the company's momentum and projected sustained growth in the face of macro uncertainty. The CEO also highlighted the positive impact of their Reinvention plan on partner and customer experiences. Starbucks CFO, Rachel Ruggeri, emphasized that the company's fiscal year 2024 guidance reflects a balance of revenue growth and margin expansion, showcasing the successful execution of their Reinvention plan.

The news is encouraging as it suggests an emergence of the Chinese consumer which has been a drag on results. It also suggests that, while U.S> consumers are slowing their spending habits, Starbucks coffee looks like one area where they prefer to keep their daily habits.

Shares of SBUX have rallied 10% in reaction to the report. The stock is testing key resistance at the $100-psyche which also houses the 200-day moving average. A pullback to the $96 area would make for an ideal entry for someone shopping for a year end swing position.

Overall, Starbucks delivered strong earnings in Q4, driven by robust comparable store sales growth in key markets. The company's strategic focus on its Reinvention plan, along with its plans for continued global expansion, positions it well for future growth and value creation.