Starbucks Brews Profits as Lunch Menu Expands

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

July 25 (Bloomberg) -- Bloomberg’s Yang Yang breaks down third-quarter results from Starbucks the coffee retailer topped profit and revenue estimates and Chief Executive Officer Howard Schultz sets the company’s sites on a lunch menu. She speaks on “In The Loop.”

Drove there -- their bottom line.

Alix, that's exactly what happened.

Starbucks, as we all know, definitely a coffee company at its core, but for the third quarter, it was food that came out as the standout.

It was characterized as an outstanding and strong third quarter for the world's largest coffee company.

Let's go through the highlights.

For the third quarter, they clocked in a net income of $513 million, about a 23% gain from a year ago.

Earnings per share in at $.67, beating the street estimate by one cent on revenue of $4.2 billion for the quarter.

Global same-store sales growth locked in at 6% for an impressive 18th consecutive quarter of comp growth of 5% or more.

7% for asia, helped largely by china, and 3% for europe, the middle east, and africa.

Food drove 2% of comp growth in the united states alone.

They are optimistic for what is to come, helped by the fact that as coffee costs rise, they have locked in about 60% of coffee prices for the next year, giving them a big leg up on their competitors.

They have increased their earnings-per-share estimate for the current quarter, up by two cents.

Things are looking good.

Strong quarter for starbucks.

Starbucks also just raised prices.

Hopefully they lock in those coffee prices and you will see -- potentially grow some margins there.

What is next down the pipeline?

Some stores are selling real cheese now, which seems crazy to me.

The one big thing that howard schultz said in yesterday's call was expect the lunch hour to look different.

They have a few things coming down the pipeline.

They will be increasing their food offerings.

The teas and starbucks reserve coffee line.

They will be introducing more 24-hour stores across the globe.

Those have been very successful.

Also successful, starbucks' store in the magic kingdom.

They've had a great partnership with disney.

They say expect that to expand in many locations around the world.

They are testing the possibility of a mobile ordering app.

It would let users order their coffee online, on their phones, and to pick them up in the store.

That would be a game changer.

Absolutely.

If you don't go into mobile, you will pretty much be dead in a couple of years.

Interesting point.

Get some coffee.

Coming up, bnp paribas is one of

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change