Starbucks Corp (SBUX) USD0.001
HL comment (23 January 2015)
First quarter results: The world's biggest coffee chain unveiled a 13% rise in revenues to a record $4.8 billion in the first quarter. Global same-store sales were up 5%, with a 2% increase in store traffic, the company reported in a statement. Comparable store transactions jumped by nearly 9 million in the US, and nearly 12 million globally. 'Starbucks record Q1 fiscal 2015 financial and operating performance was exceptional by every metric and standard,' said CEO Howard Schultz, in a statement. The company also announced that Kevin Johnson, former CEO of Juniper Networks, would become President and Chief Operating Officer on 1 March. Troy Alstead, Starbucks' current chief operating officer, announced plans to take a year-long sabbatical earlier this month. Based on the combined estimates of analysts that cover the company, market consensus opinion remains a strong buy.
- For the quarter, Starbucks posted an 82% rise in profits to $983.1 million, from $540.7 million a year earlier.
- Revenues increased 13% to $4.8 billion.
- The company repurchased a near 3 million shares during the quarter.
- The Board of Directors declared a cash dividend of 32 cents per share.
- Starbucks faces increasing competition from fast-food chains offering speciality coffee.
- The shift to online shopping may impact on sales growth.
- Any downturn in the global economy would impact on sales performance. The company has ambitious international expansion plans against a headwind of unsettled global economic conditions.
- The company completed the first step of its tender offer to acquire Starbucks Japan in the quarter, bringing its total ownership of the market to a controlling 79% interest in Q1. The transaction is expected to be fully complete in the first half of 2015, resulting in 100% ownership.
- Starbucks has been diversifying in recent years from its traditional coffee business by adding more packaged products and food.
- The first Starbucks Reserve roastery and tasting room opened in Seattle in early December, with another 100 planned globally.
- The company opened 1,599 new stores globally in 2014, including 742 in the China Asia Pacific region, 698 in the Americas and 171 in Europe Middle East & Asia. The company added 512 new stores during the quarter bringing the total to 21,878 around the world.
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