Analyzing the Financial Performance of Starbucks and Luckin Coffee

Abstract

Numerous industries have been significantly affected by the Covid-19 pandemic, including the coffee industry. People were forced to stay at home, many coffee shops had to shut down due to the lack of customers. However, as the pandemic subsides, the coffee market now is recovering and growing at a rapid pace. Now Starbucks has over 36,000 coffee stores around the world, covering 84 countries, while in the Chinese mainland, it operates more than 6,000+ stores in over 230 cities. It is expected that by 2025, the number of Starbucks coffee shops in China will reach 9,000, covering 300 cities. In contrast, Luckin Coffee, China's largest coffee chain, in the number of outlets in China, has surpassed Starbucks with 7,846 coffee shops as of Q3 2022 and in Jan 2023 the outlets exceeded 8,400 with the accelerated growth. This essay aims to study these two key players in the coffee industry, Starbucks and Luckin Coffee, to compare their financial data via the financial statement of Year 2021 and the stock movement from May 18, 2019, to Jun 30, 2020. This analysis will bring a deeper understanding of the two companies with investigations and observations with the respect of their financial and stock performance.