Starbucks posts big holidays, but weaker sales in China

Starbucks had a strong holiday season in the U.S. but weaker sales in China as its ended the second year of the pandemic.

U.S. same-store sales, or sales at stores open at least a year, were up 18% over the October-December period a year ago.

The Seattle-based coffee giant said more U.S. customers were visiting at all times of the day and spending more per visit.

But same-store sales in China fell 14%, partly due to continuing lockdowns.

Starbucks’ revenue rose 19% to $8.1 billion in its fiscal first quarter.

That was ahead of Wall Street’s forecast for revenue of $7.89 billion, according to analysts polled by FactSet.

Overall same-store sales growth of 13% was in line with expectations.

But Starbucks fell short of earnings forecasts, and said inflation, continuing pandemic-related costs and rising labor costs were a contributor.

In October, the company said it was raising workers’ pay to ensure a steady workforce amid labor shortages.

The company said all of its U.S. workers will earn at least $15 – and up to $23 – per hour by this summer.

Workers can also get a $200 recruitment bonus to help attract new employees.

But the announcement didn’t pacify some workers, who are calling for more say in the way the company’s stores are run.

Two Starbucks stores in Buffalo, New York, recently became the first Starbucks stores to unionize in decades, setting off a wave of union activity at other stores across the country.

As of this week, 54 stores in 19 states have filed for union elections, according to Workers United, the union organizing the effort.

Google profits increase 36% in last quarter

SAN RAMON, Calif. – Google’s digital advertising empire turned in another strong performance during the holiday shopping season, propelling a 36% increase in its corporate parent’s revenue during the final three months of 2021.

The results announced Tuesday underscore how technology giants have adapted to become even more successful during a nearly two-year pandemic that has roiled much of the economy.

In a show of confidence intended to make its shares more affordable, Google parent Alphabet also announced plans for its first stock split since 2014.

If approved, the proposed 20-for-1 split will reduce the price for each share this July while keeping Alphabet’s market value intact.

Alphabet’s stock surged 7% in extended trading after the news came out.

Google stumbled during the early stages of the pandemic in 2020, causing it to suffer its first year-over-year decline in quarterly revenue.

But as government-imposed lockdowns led people to order more takeout and shop more online, Google’s dominant online ad network became even more of a magnet for merchants trying to connect with consumers corralled at home.

In last year’s October-December period, Google raked in $61.2 billion in ad sales, a 33% increase from the same period during the previous year.

As usual, Google’s ad business accounted for the bulk of Alphabet’s profits.

The Mountain View, California, company earned $20.6 billion, or $30.69 per share, well above the average estimated of $27.66 per share among analysts surveyed by FactSet Research.

Revenue rose 32% from the previous year to $75.3 billion, eclipsing analysts’ predictions for revenue of $72.3 billion.

The impressive numbers pushed Alphabet’s share price near $3,000 in extended trading.

If the stock is hovering around that price at the time of the proposed stock split, the shares would be repriced at about $150 apiece.

In 2021, Google’s ad revenue topped $200 billion for the first time in the company’s 23-year history.

Last year’s ad sales of $209.5 billion represented a 55% increase from the $134.8 billion posted in 2019 – the last full year before the pandemic changed everything.

In a change from recent quarters, advertising growth on Google’s YouTube video service lagged slightly behind overall gains in the business.

In the most recent quarter, YouTube’s ad revenue totaled $8.6 billion, a 25% increase from the previous year.

For all of 2021, YouTube pulled in $28.8 billion in advertising, nearly double its 2019 haul.

Google’s prosperity has made it a target for both regulators and lawmakers, who believe the company has been abusing the power of its popular search engine and other services such as Maps, Gmail and the Chrome browser to unfairly trample competition.

Some of those claims are being aired out in a series of antitrust lawsuits filed in 2020 by the U.S. Justice Department and state attorneys general.

GM posts $10B profits for 2021; up 56% over 2020

DETROIT – General Motors increased its net income 56% last year, helped by higher prices for its vehicles that were made scarce by a global shortage of computer chips.

The Detroit automaker said Tuesday that it made $10.02 billion for the full year.

And it predicted record pretax earnings in 2022 of $13 billion to $15 billion and net income of $9.4 billion to $10.8 billion.

Excluding one-time items, GM made $7.07 per share for the year, beating analyst estimates of $6.83, according to FactSet.

Full year revenue of $127 billion fell short of estimates of $128.7 billion.

In the fourth quarter, GM made a $1.7 billion net profit.

GM’s sales in the U.S., its most profitable market, fell 13% for the year, and it was unseated by Toyota as the nation’s top-selling automaker for the first time.

The company lost almost 3 percentage points of market share, which fell to 14.6%

But GM’s average vehicle sales price rose almost 20% in the fourth quarter from a year ago to nearly $54,000 as it sold more loaded-out trucks and SUVs, according to Edmunds.com.

Nearly all automakers have been forced to cut production due to the global semiconductor shortage, leaving few new vehicles on dealer lots.

From wire reports