Coffee-bar icon Starbucks said that 90% of its stores in China are now open and that the board authorized management to add as many as 40 million shares to its buyback plans.
Starbucks in January closed more than half its China stores in response to the coronavirus outbreak.
In a statement ahead of the company’s virtual shareholders meeting on Wednesday, Chief Executive Kevin Johnson said the Seattle company was “deepening [its] long-held commitment to elevate specialty coffee in China.”
Starbucks is doing that by opening a “state-of-the-art coffee innovation park in China in 2022,” Johnson said.
“The facility will incorporate a roasting plant, warehouse and distribution center, creating highly skilled jobs and new career opportunities that will help drive smart and sustainable coffee manufacturing.”
This represents Starbucks’ largest coffee manufacturing investment outside the U.S. and the first in Asia. The company is aiming to have 6,000 stores in China by 2022, up 40% from 4,290 now.
As for the 40 million-share buyback authorization, that’s in addition to 16 million shares that remained available as of Dec. 29, 2019, under an existing authorization.
At Dec. 29, the end of its fiscal first quarter, the company had 1.19 billion shares outstanding.
In the fiscal year ended Sept. 29, 2019, the company repurchased 140 million shares.
“Starbucks has the financial strength and resilience to manage through this extraordinary time,” Johnson said. “The increase in our share-repurchase program reflects our confidence and optimism about the long-term growth opportunity for our business.”
At last check, Starbucks shares traded at $55.94, down 5.2% The stock had dropped 17% in the 12 months through Tuesday, compared with a 14.2% loss for the S&P 500 index.