Starbucks Corporation (SBUX) is a marketer and retailer of coffee, and has its presence in about 60 countries. The company started off in 1987 with a mere 17 stores. Now, Starbucks operates more than 17,650 locations across the globe, and its brand is universally recognized. This year seems to be great for this Seattle-based coffee giant.
Recent Report Card
The Q4 profits of Starbucks are up by a jaw-dropping 34%. There is a 7% increase in global same-store sales and a 13% increase in revenue, no small feat for a company of Starbucks’ size. The stock has doubled exactly 8 times in its 21 year stock history. The inelasticity of demand for their coffee leaves a lot of room to maneuver, and this works in Starbucks favor profit wise. Their profit margins stand at 10% and gross annual profits at $1.3 billion.
Revenue rose to $3 billion, while the operating income surged 28.7% to $668.9 million. For the full year, Starbucks revenues surged 12% to $14.9 billion, while the net income jumped 24.4% to $1.7 billion. The company’s earnings have benefited from strong performances in the U.S. and China, where same-store sales grew 8% in both markets. Sales are getting boosted by higher customer traffic as a result of increased usage of mobile apps to place orders.
— Guru Focus