In a recent interview with Yahoo Finance, Starbucks Chief Financial Officer (CFO) Rachel Ruggeri reaffirmed the company's commitment to the California market, despite the upcoming implementation of the state's FAST Act. The legislation, which will raise the minimum wage for fast-food workers to $20 per hour, will go into effect on April 1, 2024.

Ruggeri emphasized that the closure of some Starbucks stores in California was part of the company's routine and ongoing quarterly process. Currently, the state boasts the highest number of Starbucks locations, with approximately 3,100 stores, accounting for 19% of the company's real estate portfolio, as reported by data platform ScrapeHero.

With over 38,000 company-operated and franchised stores worldwide, including more than 20,000 outside of North America, Starbucks benefits from its geographic diversity, enabling it to balance any potential risks associated with state-level regulations.

Regarding the impact of the upcoming minimum wage increase, Ruggeri stated, "It's quite small in the scheme of things as it relates to the California... FAST Act and the wages." While the company is still evaluating the effect, Ruggeri assured that it is already factored into Starbucks' fiscal year 2024 guidance.

In October, Starbucks closed seven stores in San Francisco, as part of its regular operational adjustments. However, Ruggeri reiterated that these closures were simply a normal ongoing process.

Meanwhile, Chipotle's CFO recently disclosed that the company might have to raise prices to offset California's higher wages, but no final decision has been made, and Starbucks has not yet announced any changes in their pricing strategy.

Looking ahead, Starbucks expects global same-store sales to grow between 5% and 7% for fiscal year 2024, slightly lower than its previous long-term guidance of 7% to 9%. The company also foresees total revenue growth to be on the lower end of the 10%-12% range, while earnings per share (EPS) are projected to grow between 15% and 20%.

To expand its US presence, Starbucks plans to open 4% more net new stores in fiscal year 2024, aiming to reach a total of 20,000 stores across the country.

Furthermore, Starbucks remains focused on its international growth strategy, particularly in China, where CEO of Starbucks China, Belinda Wong, highlighted that only 35% of Chinese middle-class consumers currently drink specialty coffee at least once a quarter. This presents an opportunity for Starbucks to increase the penetration and frequency of its products in the Chinese market.

The company aims to expand to 9,000 stores in China within the next two years, with plans to open nearly 1,000 new stores annually. In China, Starbucks expects sales growth between 4% and 6% in the second through fourth quarters of 2024.