Market Overview

3 Things Starbucks Investors May Have Overlooked


Starbucks Corporation (NASDAQ: SBUX) reported net sales of $4.2 billion in its fourth quarter results on Thursday. Analysts were expecting the company to report sales of $4.23 billion.

Starbucks Americas disappointed analysts as same-store sales rose only 5 percent, short of the 6.2 percent analysts expected. In addition, Starbucks Americas reported same-store sales growth of 6 percent in the prior quarter. Traffic to Starbucks Americas rose only 1 percent in the fourth quarter, marking a slowdown from 2 percent growth the company saw in the third quarter.

Related Link: People Seem To Love Starbucks' New Secret Drink

In an article on, Belus Capital's Brian Sozzi took a look at three initiatives the company announced that may have flown under the radar.

First, Starbucks plans to launch a food and beverage delivery service in the second half of 2015. The company did admit it is in the "very early days" of the initiative and is currently working with partners to handle the distribution system, but plans to update investors in December.

Second, Starbucks intends to launch "several hundred evening stores" shortly. These stores will be known for selling food menu items that could be shared among a group, potentially taking market share away from restaurants known for appetizers including Applebee's and TGI Friday's. Additionally, Starbucks has already tested selling beer and wine in some locations.

Finally, Starbucks continues to target sales growth in China. In the fourth quarter, same-store sales slowed to 5 percent growth from 7 percent in the prior quarter due to lower sales of seasonal packaged goods products.

Latest Ratings for SBUX

Jul 2019MaintainsNeutral
Jul 2019Initiates Coverage OnBuy
Jul 2019DowngradesOutperformNeutral

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Posted-In: Applebee's Brian Sozzi StarbucksAnalyst Color Earnings Restaurants Analyst Ratings General


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