AFTER starting its Caribbean expansion nearly a decade ago, Starbucks Corporation will see the addition of four new licensed stores in Trinidad and Tobago during 2022, and Guyana’s first store to be opened between September to November by Trinidadian-based Prestige Holdings Limited (PHL) which won the development rights for the country.
Starbucks currently has a presence of more than 70 stores across ten markets in the Caribbean. In the English-speaking Caribbean, Caribbean Coffee Traders Limited (CCTL) — a joint venture between Ian Dear and Adam Stewart — has the rights to develop stores in Jamaica, Barbados, Turks and Caicos, the Cayman Islands and Panama. CCTL opened its 12th location in January at Drax Hall, St Ann, and expects to achieve its 15th location by the end of 2023. Half-Way-Tree is the next location set to be opened in Jamaica.
Guyana continues to see an unprecedented level of interest by various companies across the region as its oil income begins to flow through the economy. NCB Financial Group Limited, Supreme Ventures Limited, Dolla Financial Services Limited and Massy Holdings Limited have all opened subsidiaries or began operations in the South American country.
First Citizens Financial Group Holdings Limited is attempting to complete the acquisition of Scotiabank’s Guyana operation.
PHL is a restaurant management company which has the development rights for the TGI Fridays brand in the Caribbean, along with the rights to Kentucky Fried Chicken (KFC), Pizza Hut, Subway and Starbucks in Trinidad and Tobago. There are eight Starbucks locations in Trinidad and Tobago, with the additional locations set to take it to twelve by the end of its 2022 financial year (November 30). There are more than 34,300 company-operated and -licensed Starbucks locations across 84 markets as of January 2.
PHL’s two newest Starbucks locations in T&T feature mobile order pickup and an e-commerce portal to facilitate their orders. The locations are also equipped with the Masterna 2.0 Expresso machines.
Although PHL’s revenue for the first quarter improved by five per cent to TT$246.38 million ($5.75 billion), its gross margins were further eroded from 32.88 per cent to 31.61 per cent as global supply chain disruption put more pressure on the company’s operational costs through food inflation and additional logistics disruptions. Gross profit was flat for the period at TT$77.87 million. PHL earned TT$256.57 million in revenue and TT$84.97 million in gross profit during Q1 2019. PHL closed a Subway location during the quarter, which reduced its store count to 128 locations, inclusive of the TGI Fridays location in Jamaica.
“The removal of the COVID-19 restrictions is cause for optimism, though much work must now be done to return our business to pre-pandemic levels and beyond. As we look forward we remain positive about the ability of our people and brands to deliver improved results in 2022 and beyond,” stated chairman of PHL Christian E. Mouttet in the shareholder report.
As a result of those cost pressures, PHL reduced its other operating and administrative expenses to TT$50.92 million and TT$16.77 million, respectively. These cost-cutting measures, along with the growth in digital, delivery and drive-through sales, resulted in PHL generating a net profit of TT$2.01 million ($46.92 million). This is far from the Q1 2020 and Q1 2019 net profit figures of TT$8.23 million and TT$5.65 million, respectively.
Total assets for PHL declined by five per cent to TT$733.69 million ($17.11 billion) as property, plant and equipment, along with its right of use assets, declined. Cash and cash equivalents improved to TT$58.91 million ($1.37 billion) at the end of the quarter. Total liabilities and shareholders’ equity ended the period at TT$474.13 million and TT$259.56 million, respectively.
Starbucks exceeded market expectations with revenue of US$8.05 billion in its first quarter (January 2) but missed on earnings per share (EPS) targets which came in at $0.72 versus the $0.80 consensus. The company attributed this fall to higher costs in its supply chain and more employees using their sick leave allotment. The company revised its guidance for 2022 to see global revenue fall between US$32.5 billion to US$33 billion, global operating margin of 16.5 per cent, and a four to six decline in generally accepted accounting principles (GAAP) EPS. The stock price remains down 30 per cent year to date at US$81.48, with market capitalisation of US$93.70 billion. [Jamaica Observer]
