When was the last time you grabbed a coffee at Starbucks Corporation (NASDAQ:SBUX) on your way to work? Chances are it was today. What is it that makes this brand America’s favorite coffee? All those who swear by Starbucks’ coffee, read on to find out what makes this brand tick.
The last quarter
In its last quarter, Starbucks Corporation (NASDAQ:SBUX)’ comparable-store sales grew 6%, driven by increased traffic and the average transaction amount. Net revenue for the quarter climbed 11% from the same period a year ago to $3.6 billion. Net earnings increased 26% to $390.4 million. Diluted earnings per share were up $0.11 from last year to $0.51 for the quarter. This included a $0.03 one-time gain from the equity sale in a Mexican joint venture.
In the US, Starbucks Corporation (NASDAQ:SBUX) saw its same-store sales advance by 7%. Contrary to popular belief, Starbucks Corporation (NASDAQ:SBUX) is far from reaching its saturation point in the US, where more than 70% of the company’s revenue is generated. The company plans to add 1,500 new cafes in the country over the next five years.
The highest driver of sales in Starbucks Corporation (NASDAQ:SBUX)’ last quarter was in the China and Asia Pacific region, where the company generated 8% sales growth as compared to the previous year. Comparatively, Europe, the Middle East and Africa (EMEA) didn’t fare as well, and saw sales decline by 2%.
Overall, Starbucks Corporation (NASDAQ:SBUX)’ results were impressive, to say the least. According to CFO Troy Alstead, the reason behind the performance was that Starbucks is relatively “insulated” from the issues troubling its peers, which includes setbacks such as severe winter conditions and a payroll-tax hike.
Dunkin Brands Group Inc (NASDAQ:DNKN), parent company of Dunkin Brands Group Inc (NASDAQ:DNKN)’ Donuts and Baskin-Robbins, for example, saw its last-quarter results significantly affected by severe weather this winter. The company’s US comparable-store sales grew by a modest 1.7% as compared to the previous year.
Internationally, the company did better, however, and reported 4.7% growth in international system sales. Major drivers of sales growth were South Korea and Southeast Asia. For the next few quarters, Dunkin Brands Group Inc (NASDAQ:DNKN)’ plans to toy with innovative products and ideas, such as a singing birthday cake at Baskin-Robbins, a wider breakfast and bakery menu at Dunkin Brands Group Inc (NASDAQ:DNKN)’, and the use of mobile technology to drive sales globally.
The path ahead
For the future, Starbucks’ main focus is expansion in China and Asia Pacific.