Starbucks Beats


Every year at this time, Starbucks rolls out its range of "holiday drinks". This means fancy coffee-based concoctions for Halloween, Thanksgiving, Christmas, Hanukkah, New Year and even Kwanzaa. Hey, anything for a bit of media buzz, right? Holiday season is spending season, a good time for customers to spend, businesses to make a profit and investors to enjoy share price gains.


Ackman piles into Starbucks


I have always enjoyed following Bill Ackman's antics within the investment community. For a hedge fund billionaire, he is relatively young and likes to ruffle the feathers of some of the grumpy, old-school titans of the industry. I don't necessarily agree with all his investment decisions but none the less he is very smart and talented.


Starbucks 3Q - Same store slows


On Thursday last week Starbucks released their Q3 results. Revenues were up 11%, resulting in EPS growing by 13% to 62c. Comparable store sales, however, were only up 1% which means most of their growth came from new stores. Another important metric is the 15.1m active Starbucks Rewards members. Amazon Prime has proven how much more loyal members end up spending. That subscriber number is becoming significant for Starbucks.


Starbucks Drops Straws


Over the weekend it was announced that Starbucks will be ditching straws. As an alternative, they will be using "adult sippy cup" lids as seen below.


Is Starbucks A Value Trap?


The Starbucks share price has taken a hit after the recent company update which suggested a slow down in the US and the closing of some stores in that region. Should we be worried? We don't think so.


Starbucks Company update


Starbucks held an investor presentation last night and revealed a few important business developments. Here are the highlights.


Starbucks 2Q - loyalty up


Coffee colossus Starbucks released their second-quarter numbers stating that the company operates over 28 000 stores across 70 countries. The company saw a growing number of people join their loyalty program, which in turn has helped with global same-store sales growth. Starbucks also showed good numbers both in its home market and China.


Starbucks 1Q - slow in US, strong in China


Last week Starbucks released its First Quarter numbers. Below, Paul goes into our thinking around owning them, so I will focus on the numbers. This was the first time that they had over $6 billion in revenue for a quarter, that is a monster number for a company that sells coffee! For comparison purposes, Woolworths' current market cap is R70 billion, Starbucks sold more in three months than the entire value of Woolworths.


Starbucks 3Q - Buying our China partner


Last week Thursday we received third quarter results from Starbucks. Revenues increased 8% to a third quarter record of $5.7bn. This was on the back of comparable store sales increasing 5% in the US, 7% in China and 4% globally. The rest of the increase would have come from new stores which are flying in at 1.6 a day. 1 a day of those are in China alone.


Starbucks 2Q numbers - massive China growth


At the end of April we had Q2 numbers from Starbucks which missed what the market was hoping for. The result was a 1% drop in the share price, so not a huge miss. Having a look YTD, Starbucks is up 10% when the broader market is up a little over 7% so the company is still doing better than the average. Onto the numbers!


Starbucks 1Q numbers - light on growth


Starbucks is another business that reported numbers after the bell yesterday. The headline says it all - Starbucks Reports Record Holiday and Record Q1 FY17 Results. Revenues rose 7 percent to 5.7 billion Dollars, a strong showing in both China and decent enough in the home market. What is also being highlighted is the number of US rewards memberships, which rose 16 percent to 12.9 million folks. Earnings per share grew 11 percent to 51 cents, margins increased by ten basis points, which is always good to see as a shareholder, moving in that direction. The company has a fairly generous dividend policy, 25 cents a share is the current quarterly dividend payment, up from 20 cents previously.


Schultz shuffles over, COO holds the coffee cup now


There was the inevitable announcement that came, still Mr. Market did not take that kindly, the stock is down over three percent in the aftermarket. Starbucks Announces New Leadership Structure to Drive Next Wave of Global Growth. Howard Schultz is handing over the baton to Kevin Johnson, who is currently the Chief Operating Officer of Starbucks.


FY numbers, store rollout continues


Starbucks reported results for their fourth quarter and full year last evening after the bell. The stock has had a pretty awful year-to-date performance, down 13 percent. Over the last decade however, the stock is up 183 percent. Coffee drinking is more than just that. For some people it is an art. Michael used to have a flatmate that took it to the nth degree, cold brewing overnight. Some people grow tomatoes, some people brew their own beer, some people roast their own coffee beans.


Starbucks 3Q 2016 numbers - strong store rollout


At the end of last week we had 3Q numbers from Starbucks, which missed some analyst estimates. To say that they missed estimates is not to say they had a poor quarter, they still grew revenues by 7.3% to $5.24 billion and grew EPS by 24% (not too shabby hey nige).


Starbucks 2Q numbers - good growth in China


Last Thursday night we received second quarter results from Starbucks. But before we delve into the numbers let us look at some of the hype created here in South Africa after the first Starbucks was opened in Rosebank. Check out the SAStarbucks twitter account for some pictures of the opening. Apparently there were queues until the early hours of the morning and there still are. The brand strength is incredible and the drive for quality coffee, especially in developing markets is growing like China (that analogy should be used more often, no, China is not finished, as you will no doubt see in the numbers below).


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