The recent addition of local favorites such as Peach Blossom Tea Latte and Chestnut Macchiato to its menu combined with further development of its membership-rewards program have helped the company gain ground in the region. Starbucks plans to continue with the above initiatives as it wants to develop China as the biggest market after the US. By 2015, the company plans to open 1,500 cafes in China.
Strong performance in the second quarter makes Starbucks confident about the remainder of 2013. The company increased its expectations for its full-year earnings per share to a range of $2.12 to $2.18 from its previous expectation of $2.06 to $2.15.
What to expect?
While Starbucks remains at the top of its game, it may face competition from its peer Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). In its last quarterly results, the company reported some great numbers. Revenue for the quarter grew 14%, while earnings per share increased by an astounding 50% to $0.87. Keurig Single Cup Brewers and related accessories contributed the majority of the sales for the quarter.
With good numbers flowing in, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) looks all set for growth in the quarters to come. Not surprisingly, the company expects sales growth of between 15% and 20% in 2013. Earnings per share are expected to between $3.05 and $3.15 as compared to $2.40 in the previous fiscal year. In the quarters to come, the company plans to achieve higher penetration of Keurig systems in US households, and also to experiment with new products and new geographical regions.
Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)’s share price has come a long way from the lows reached in 2012, surprising many who expected the stock to fall post September. That’s when its K-Cups patent expired and Starbucks launched Verismo, Keurig’s competitor. All in all, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has been doing quite well and will probably continue doing so.
What to do?
When it comes to brand loyalty, no one does it better than Starbucks. The company has more than 11,000 outlets in the US, with more coming in the future. Expansion in countries like Brazil and India in the years to come will only add to its global brand image.
An ever-increasing customer base, expansion plans in key markets, a solid track record at home, and great numbers in its quarterly results make me optimistic about this stock. Shares are trading near their 52-week high. This makes them a tad expensive but I’d still want to go long. This is one stock that is a must-have in your long-term portfolio.
The article One Company Everyone Is Talking About originally appeared on Fool.com is written by Sonam Chamaria.
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