Research archive for SBUX

The worlds largest FMCG company Nestle seems to be doing better than before. The company reported a 4.3% increase in sales in the first quarter and this is thanks to their partnership with Starbucks as people enjoy drinking a Starbucks coffee outside of Starbucks.

Remember that fantastic deal Starbucks managed to secure with Nestle? Nestle paid Starbucks $7.15bn in cash for exclusive rights to sell Starbucks labelled coffee beans and pods. Starbucks will still receive a percentage of the sales. The power of a strong brand!

Last night Starbucks released their first quarter results for the period ending 31 December. Remember that Starbucks went through a slump in the US which resulted in a 2-year share price lag. However, since June last year the share is up 28% and was extremely resilient during the end of year sell-off. It does pay to be patient.

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.

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.

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.

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.

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

The more I look at this Starbucks - Nestle deal, the more I realise how good it is for Starbucks. The deal will bring $7.2bn in upfront cash, but Starbucks will still retain around 35-40% of the economics of the business due to the royalty agreement. That just shows the strength of their brand.

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.

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.

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.

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 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.