5 Key Takeaways From Starbucks Latest Earnings Call

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Starbucks reported record earnings yesterday after the market closed. Here’s what investors need to know about the future of Starbucks.

Starbucks reported record earnings yesterday after the market closed. Here’s what investors need to know about the future of Starbucks.

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  • 1. 5 Key Takeaways From Starbucks Latest Earnings Call
  • 2. Earnings: Starbucks Trumps Wall Street • Analysts were looking for earnings of $0.66 per share in the quarter. • Wall Street was expecting revenue to climb 10% to $4.1 billion in the period. • Starbucks over delivered on both, with EPS of $0.67 and revenue of $4.2 billion. A Starbucks barista shakes things up. Source: Starbucks.
  • 3. 1. Unmatched scalability • With 21,000 stores across 65 countries today, Starbucks is able to lock in meaningful cost advantages that smaller coffee chains can’t. • Starbucks plans to open 1,550 net new stores this year. Starbucks now serves 70 million customers in 65 countries each week. Source: The Motley Fool.
  • 4. 2. Impressive comparable sales • Sales at stores open at least a year increased 6% globally in the latest quarter, marking the company’s 18th consecutive quarter of comp sales gains of 5% or higher. The coffee chain continues to offer impressive same-store sales growth. Source: The Motley Fool.
  • 5. 3. Taking the $90 billion global tea market by storm • “We introduced both Teavana Oprah Chai and Teavana Shaken Iced Tea to tremendous customer response,” said Howard Schultz, Starbucks chief executive. • Starbucks recently opened its fourth Teavana tea bar in New York. Starbucks is reinventing the tea category with stand-alone Teavana stores. A Teavana store in LA. Source: Starbucks.
  • 6. 4. New product innovations • Starbucks is now serving its Fizzio handcrafted sodas at 3,000 U.S. Starbucks locations. • Because of the initial success in these test markets, Starbucks now plans to offer Fizzio in select international markets in the quarters ahead. Starbucks enters the $415 billion carbonated-beverage market. Fizzio handcrafted sodas. Source: Starbucks.
  • 7. 5. Food for thought • Management said the improved quality and variety of Starbucks food contributed two points of comp growth in the quarter. • Food is also driving significant margin improvement through lower manufacturing costs tied to its acquisition of La Boulange Bakery. A turkey sandwich melt. Source: Starbucks.
  • 8. Foolish final thoughts… From increased comparable sales thanks to Starbucks’ growing food program, to new product offerings like Fizzio sodas and Oprah chai tea, Starbucks is firing on all cylinders these days. These developments should act as catalysts for the stock going forward, as Starbucks continues to dominate the world coffee and tea markets.
  • 9. Try the Motley Fool’s Investing Service Risk- free For 30 Days.