Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Why You’re Spending More at Starbucks Corporation (SBUX)

Starbucks Corporation (NASDAQ:SBUX) cup. Getting thirsty? Source: The Motley Fool

Americans are shelling out more cash than ever before at Starbucks Corporation (NASDAQ:SBUX). The coffee giant booked a huge increase in revenue over the spring months, and celebrated the second-best quarterly profit in its 42-year history.

Powering that result are a few trends that have investors optimistic that the growth will continue. Here’s a closer look at the three biggest factors that are pushing  Starbucks Corporation (NASDAQ:SBUX) spending levels higher.

You’re visiting more often
First, we are having more frequent interactions with Starbucks Corporation (NASDAQ:SBUX) baristas these days. The coffee giant booked a 9% jump in comparable sales in the U.S. last quarter, driven by a 7% boost in customer traffic, and a 2% rise in average ticket prices.

What makes that so impressive is that other mass-market chains aren’t having as much luck attracting customers into their stores. McDonald’s Corporation (NYSE:MCD) comparable sales grew by just 1% over the same period, and the company warned that results for the rest of the year are “expected to remain challenged.” Things weren’t much better at the higher end of the casual dining sector. Sales at Panera Bread Co (NASDAQ:PNRA) were up just 3.8% in the quarter, below the company’s expectations. Panera Bread Co (NASDAQ:PNRA) also warned about a bumpy year ahead as it works to get the kitchen humming at full speed again. Starbucks Corporation (NASDAQ:SBUX), meanwhile, expects a robust 10% to 13% revenue gain next year.

You’re digging the specialty drinks
Product innovation is also helping boost Starbucks Corporation (NASDAQ:SBUX)’ sales. Its seasonal and “indulgence” drinks were a hit this spring. In fact, demand was so high for Starbucks’ Valencia Orange Refresher and Caramel Ribbon Crunch Frappuccinos, that sales “exceeded even our most optimistic expectations,” according to management.

The fall could be just as strong, as the company kicks off its 10th year of selling its wildly popular Pumpkin Spice Latte.

You’re eating the food

Starbucks’ food menu is growing. Source: Starbucks.

Finally, while it dominates in the beverage department, Starbucks Corporation (NASDAQ:SBUX) hasn’t exactly been known for offering the best food options. That’s one of the reasons why food sales have been stuck at 19% of revenue for the past three years running.

But that could be set to change this year. Starbucks credits “increased food attachment” for helping power its sales boost in the U.S. last quarter. Customers have been responding enthusiastically to an expanded menu of La Boulange baked goods that was made available at over 1,000 Starbucks stores on the West coast.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.