Starbucks (SBUX) Stock Unmoved as China Deal and Bonus Plan Land on Same Day

TLDR

• Starbucks closed its joint venture deal with Boyu Capital, giving the firm a 60% stake in Starbucks China operations.
• Starbucks retains a 40% stake and continues to license its brand and intellectual property to the venture.
• The China joint venture oversees ~8,000 stores, with plans to expand to 20,000.
• Starbucks announced weekly pay, mobile tipping, and a bonus of up to $1,200/year for U.S. workers.
• Despite the announcements, the stock inched just 0.1% higher after hours and finished fractionally lower during regular trading.

Starbucks (SBUX) stock closed fractionally lower during regular trading on Thursday and rose just 0.1% after hours, sitting around flat, despite two major announcements from the company.

Starbucks Corporation, SBUX

Starbucks closed its joint venture with Boyu Capital, a private equity firm with offices in China, Hong Kong, and Singapore. Under the deal, funds managed by Boyu now hold a 60% stake in Starbucks’ China retail business, while Starbucks keeps the remaining 40%. The company also continues to license its brand and intellectual property to the venture.

The deal was first announced in November. Boyu’s founders include the grandson of former Chinese President Jiang Zemin.

The joint venture currently covers around 8,000 company-run stores in China. The longer-term goal is to grow that number to 20,000.

China remains a challenging market for Starbucks. The average Chinese consumer drinks just three cups of coffee per year, according to CEO of Starbucks International Brady Brewer, who made those comments at the company’s investor day in January. Starbucks has also faced stiff competition from local chains like Luckin Coffee and Cotti, which have undercut it on price.

Same-store sales in China and the Asia-Pacific region fell throughout 2024 before recovering last year, according to FactSet data.

Worker Pay and Bonus Changes

Also Thursday, Starbucks announced a new set of benefits for its U.S. workforce. The company said it will begin offering weekly pay to all U.S. workers, replacing its existing pay schedule.

It also introduced a bonus plan that lets baristas and shift supervisors earn up to $1,200 extra per year — or $300 per quarter — when their store meets certain sales, operational, and customer service targets.

On top of that, workers will now be able to receive tips through mobile orders and payments, as well as through a scan-and-pay option at the register.

The company framed these changes as part of a broader effort to retain and reward workers, improve service, and win back consumers who had pulled back due to higher prices or underwhelming in-store experiences.

Union Reaction

The new benefits come with a catch. Starbucks said they “will be subject to collective bargaining as required by federal law” at the roughly 5% of U.S. stores that have unionized, meaning those workers may not see the changes right away.

Starbucks Workers United, the union representing those employees, said it was still learning about the details. In a statement, the union said the announcement looked like a response to its organizing efforts.

The union pointed out that the bonuses and tips are largely tied to factors outside workers’ direct control, including customer behavior and metrics set by management.

Starbucks did not offer additional details beyond its initial announcements.

The post Starbucks (SBUX) Stock Unmoved as China Deal and Bonus Plan Land on Same Day appeared first on CoinCentral.