Starbucks (SBUX) is plans to keep building in the Golden State as a new higher minimum wage takes effect.

In an exclusive interview with Yahoo Finance, Starbucks CFO Rachel Ruggeri said the company remains "committed" to its markets and businesses, including its real estate portfolio in California. The state's FAST Act, which raises starting pay for fast food workers to $20 an hour, takes effect on April 1, 2024.

California has the highest number of Starbucks locations — currently around 3,100, according to data platform ScrapeHero. The state is home to 19% of the company's real estate portfolio.

The coffee giant has over 38,000 company-operated and franchised stores, with more than 20,000 stores outside of North America. The geographic diversity helps balance its risks when it comes to state-level regulations.

The company is still evaluating the impact of the FAST act, but has baked potential effects into its fiscal 2024 year guidance.

At the end of October, Starbucks closed seven stores in San Francisco, leaving the city with 52 locations.

While John Zolidis, president of Quo Vadis Capital, told Yahoo Finance that the closures may have been ahead of the FAST act, Ruggeri instead said those closures were part of a "normal ongoing, quarterly process."

Chipotle's CFO recently told Yahoo Finance that the company will have to "raise prices" mid- to high-single-digit range to offset California's higher wages but plans to wait until closer to the April 1 deadline to make a final decision. Starbucks has not said whether they would change prices.

For fiscal year 2024, Starbucks expects global same-store sales to grow 5% to 7%, down from its previous long-term guidance of 7% to 9%.

It also expects total revenue growth to be on the lower end of the 10%-12% range and EPS growth to be in the 15%-20% range.

After the market close on Thursday, the company hosted an update with investors on its Reinvention Plan, where it announced a larger reevaluation of its US store portfolio.

It plans to grow net new stores by 4% in fiscal year 2024 to reach 20,000 total stores in the US.

Jefferies Analyst Andy Barish said in a note to clients the updated plan "lowered the long-term growth algorithm to a more realistic and achievable range."

"We think new ranges were largely expected and are realistic, but maintain some conservatism should the macro outlook worsen and consumers pull back spend," he added.

Globally, it plans to increase its footprint to 55,000 stores by 2030, with an average of eight new stores a day.

China remains a top market for Starbucks, although it recognizes that only 35% of Chinese middle-class consumers drink specialty coffee at least once a quarter, said Belinda Wong, CEO of Starbucks China. That gives the company an opportunity to increase the penetration and frequency of its products.

It plans to expand to 9,000 stores in China over the next two years, with nearly 1,000 new stores per year. In China, sales growth is expected to be between 4% and 6% Q2 through Q4 in 2024.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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