SWOT Starbucks
Summary:
Starbucks has strong performance with record earning in the first quarer, strong profitable growth. Starbucks
has more than 17,000 coffee shops in about 60 countries. The outlets offer coffee drinks and food items, as well
as roasted beans, coffee accessories, and teas. Starbucks operates more than 9,000 of its shops, which are located
in about 10 countries (mostly in the US), while licensees and franchisees operate almost 8,000 units worldwide
(primarily in shopping centers and airports). Regard to expansion, Starbucks opened 212 new stores globally.
Furthermore, they also add 1.4 million new MSR members in the Usm tp 86% over 778,000 new membes
compared to a year ago.
Analysis:
Starbucks reported operating income of $3.169 billion in 13 weeks ending 2013-12-30 as compared to $2.844
billion in 13 weeks ending 2012-09-30. This resulted in improvement in the company’s operating margin from
16.2% in 2012 to 16.6% in 2013. This expansion in operating margin was driven by increased sales leverage and
the absence of charges in fiscal 2012 related to the Seattle 's Best Coffee store closures in Border 's bookstores.
Sales leverage improved as total net revenues increased 13% to $13.3 billion driven by global comparable store
sales growth of 7% and a 50% increase in Channel Development revenue. Increase in sales helped Starbucks
mitigate the impact of higher commodity costs, mostly coffee. Improved operating margin indicates efficient
cost management or a strong pricing strategy by the company. Overall, such rise in operating margin under tight
consumer spending reflects Starbucks 's focus on improving its profitability.
With regard to global retail footprint, as of September 30, 2012, Starbucks operated a total of 18,006 stores
across 60 countries comprising of 9,405 company-operated stores and 8,661 licensed stores. It expanded its
global footprint by opening 398 company operated
Starbucks has strong performance with record earning in the first quarer, strong profitable growth. Starbucks
has more than 17,000 coffee shops in about 60 countries. The outlets offer coffee drinks and food items, as well
as roasted beans, coffee accessories, and teas. Starbucks operates more than 9,000 of its shops, which are located
in about 10 countries (mostly in the US), while licensees and franchisees operate almost 8,000 units worldwide
(primarily in shopping centers and airports). Regard to expansion, Starbucks opened 212 new stores globally.
Furthermore, they also add 1.4 million new MSR members in the Usm tp 86% over 778,000 new membes
compared to a year ago.
Analysis:
Starbucks reported operating income of $3.169 billion in 13 weeks ending 2013-12-30 as compared to $2.844
billion in 13 weeks ending 2012-09-30. This resulted in improvement in the company’s operating margin from
16.2% in 2012 to 16.6% in 2013. This expansion in operating margin was driven by increased sales leverage and
the absence of charges in fiscal 2012 related to the Seattle 's Best Coffee store closures in Border 's bookstores.
Sales leverage improved as total net revenues increased 13% to $13.3 billion driven by global comparable store
sales growth of 7% and a 50% increase in Channel Development revenue. Increase in sales helped Starbucks
mitigate the impact of higher commodity costs, mostly coffee. Improved operating margin indicates efficient
cost management or a strong pricing strategy by the company. Overall, such rise in operating margin under tight
consumer spending reflects Starbucks 's focus on improving its profitability.
With regard to global retail footprint, as of September 30, 2012, Starbucks operated a total of 18,006 stores
across 60 countries comprising of 9,405 company-operated stores and 8,661 licensed stores. It expanded its
global footprint by opening 398 company operated
References: http://www.google.com/finance?fstype=ii&q=NASDAQ:SBUX http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-newsArticle&ID=1777829&highlight Dicussion question: 1. Why consolidated new revenues of Starbucks reached a record $3.8 billion in Q1 FY13 ? 2. Why sales growth in EMEA negative while in Consolidated and Americas has much higher ? 3. What will happen if the economy enters a recession again? 3. What if costs turn out to be higher than anticipated?