Tag Archives: La Boulange

Starbucks Is Still a Winner

By Andrew Marder, The Motley Fool

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Last week, Starbucks handed in an excellent second quarter, emphasizing the strengths that it has as a business, and pointing out the road that it has ahead of it. Wall Street wasn’t blown away, and the stock dropped about 1% over the course of Friday. That’s OK, though, because Starbucks met expectations, and proved that its current strategy is going along just fine.

In fact, it was more than just an average quarter, and comparable sales extended their long run of big gains. Revenue, operating margin, and income were all up as well, and management increased its fiscal-year guidance based on that strength. There are still some challenges ahead, but it looks more and more like those will turn into new sources of revenue as the company continues to grow.

Starbucks’ strategy
Start with 1,500 new stores in the U.S., and you have a good idea of what the plan looks like. Starbucks has no intention of slowing down its expansion. More than 300 of those locations will be open this year, and we’re not even talking about China yet. The company had an 8% increase in comparable sales in China, last quarter. That result helped Starbucks to global comparable-store sales growth of 6%, which made it the 13th quarter that the company exceeded 5% growth globally.

The question for investors and management is, “How will Starbucks keep that level of growth up?” Retail sales, tea, and food all come to mind as potential answers. Recently, the company has brought its bagged retail coffee into its reward system, offering customers who buy Starbucks in the grocery stores a reason to come into the cafes.

Starbucks also purchased Teavana at the beginning of the year and has announced plans to expand the business, adding eight stores last quarter with more to come. At the end of the quarter, the company already had more than 325 Teavana locations. That business will open up new consumer markets and give Starbucks something to hold onto as it grows in the United States.

Finally, food made an impact in the quarter, lifting comparable sales. Starbucks is rolling out its La Boulange range and now has a presence in 439 stores in the United States. As that line grows, the company is going to see more and more of its income generated by food. That will not only help growth, but it should also eventually help balance out costs so that a smaller percentage of the business is subject to the broad swings in coffee prices.

Competitors to watch out for
While Starbucks could be said to be in competition with every cafe, I’m looking out for Panera Bread and Kraft . Panera is the cafe that has the best shot at making a dent in Starbucks’ ironsides, with its extensive food menu and rapid growth. The company posted a comparable-sales increase of 3.3% last quarter, and the beginning of its current quarter was even

Source: FULL ARTICLE at DailyFinance

Starbucks' Brilliant Sandwich Move

By Demitrios Kalogeropoulos, The Motley Fool

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Would you like a sandwich with your coffee?

Starbucks just booked strong revenue growth for its fiscal second quarter. And the rise was fueled in part by one unlikely star product: panini sandwiches.

The coffee king’s sales jumped higher by 7% in the U.S. Of course, popular espresso beverages — like the vanilla spice latte and hazelnut macchiato — did their part by selling well. But food also played a big role in delivering Starbucks’ outsized sales gains.

Food and prepaid cards pair well
That’s partly thanks to the company’s prior success in selling massive amounts of prepaid cards. Customers loaded more than $1 billion onto their loyalty cards in the final three months of 2012, and gift cards were one of the most popular presents over the holidays. Those trends added up to billions of dollars of Starbucks money just sitting in people’s pockets, ready to be spent.

And customers chose to spend more of that cash on food last quarter. The company’s expanded availability of paninis was a hit, boosting food sales and drawing more traffic into the stores during those typically slower afternoon hours.

Satisfied customers
Thankfully for Starbucks, the uptick in food sales didn’t seem to hurt customer satisfaction, either. Speed and friendliness metrics have fallen at McDonald’s lately, and customer complaints are on the rise. It’s probably no coincidence that Mickey D’s has seen its sales growth tick down over the past few quarters.

But Starbucks has managed the opposite result. The company said that, despite the busier stores and expanded food options, order accuracy and staff friendliness metrics actually rose. The overall satisfaction scores at Starbucks locations improved last quarter by the highest amount in two years.

Another helping
All of that bodes well for the company’s ambitious plans to broaden its food menu. Starbucks spent $100 million to buy the La Boulange bakery brand last year, and it has been testing new bakery food options in its Northern California stores.

The company is happy enough with the results that it expects to introduce the new treats to all Starbucks locations over the next 18 months. Given that customers added 32% more dollars onto their loyalty cards last quarter, they’ll have plenty of money to spend on trying out the new food options when they arrive. 

Hungry for more?
With its premium beverages, McDonald’s has been pushing into Starbucks’ territory. But the company’s stock turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches reclaim its throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald’s future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.

Source: FULL ARTICLE at DailyFinance

4 Reasons to Buy Starbucks Stock Today

By Brian Stoffel, The Motley Fool

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Source: Coolcaesar at the English language Wikipedia, from Wikimedia Commons 

It would be easy to say, after two decades of breakneck growth in both the United States and abroad, that Starbucks has reached its saturation point. At this point, buying in while shares trade for 32 times earnings seems ridiculous.

While I agree that it seems expensive, I believe that for long-term shareholders, there are four key reasons the stock is worth buying today. In fact, it’s one of the five stocks I’m thinking about buying in May for my Roth IRA. I’ve been calling out one company per month for almost two years now, and the portfolio has returned 21%, beating the S&P 500 by almost 5 percentage points!

In an attempt to keep my reasoning simple, amid a mountain of knowledge available, here are my reasons for believing in the company, and its stock, today.

1. Leadership and culture
If there’s one thing I know from my own experience, and from reading about the experience of others, is that “soft” variables like leadership and culture matter. These are hard things to measure, but Glassdoor makes it a little easier. In 2013, employees were happy enough with CEO Howard Schultz to make him the 16th best CEO this year, and Starbucks was rated one of the top 50 places to work as well.

Schultz showed his resolve to maintain the company’s generous health package for employees during the recession. Wall Street noted that the company was spending more on health care than on coffee, but Schultz didn’t cave, maintaining the benefits throughout.

Should Schultz leave, or employee sentiment change drastically, that would be a cause for concern.

2. Smart growth domestically
Sure, there might not be that many areas left for Starbucks to put up new stores, but that doesn’t mean the company is just going to stay stagnant. The recent acquisitions of Evolution Fresh and Teavana have opened up new products to customers, which could, in turn, increase the total addressable market.

The company also noted that only one in three customers buys food while at Starbucks. The acquisition of La Boulange could change that statistic, as the company tries to improve the quality of its food offerings. A move in this direction could easily help the company compete with the likes of Panera , a company whose stores have a similar feel, but — for now — much better food options.

But maybe the most intriguing tidbit from the last conference call has to do with Starbucks drive-throughs. Though stores equipped with this function (like the one pictured above) account for only 20% of U.S. locations, they contribute 45% of the company’s operating profit. As the company plans to include this feature in new locations, it could be a huge boon.

By combining the food qualities from La Boulange and the drive-through in more car-centric locations, its

Source: FULL ARTICLE at DailyFinance

Starbucks CFO: Food Is a Huge Opportunity

By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss the big opportunity for enhancing the food offerings at Starbucks through the acquisition of La Boulange.

A full transcript follows the video

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Troy Alstead: Food is a critical part of our business. It’s a long-standing, core part of that coffeehouse experience, and yet we’ve recognized we have opportunity to do more in food.  

Food represents about one-third of our transactions in our stores across our system today, meaning of all the transactions, the rings through the register every single day in our stores, one-third have a food item on them. What that tells you is two-thirds don’t. That’s the opportunity. Of those two-thirds who don’t have food on them, we’ve already brought the customer in the door, we’ve acquired them, and we don’t have to pay to get them in. We know they want to be at a Starbucks and they want to experience what we have to offer them, and many of them want food.

Our opportunity is to really innovate against the quality of the food, the appearance and how we merchandise it, how they engage with the food when they come in the store, how our partners inspire them to want the food that’s there, to create that opportunity for us to attach more food items on to those hundreds and hundreds of beverage transactions that we have for our average store every day.

We’ve made great progress over the last several years and slowly but surely elevating food, driving food as a quality of our business, growing it faster than our overall category ,and yet the La Boulange acquisition allows us in ways that we’ve been excited about for a long time now, to step-change that.  So over the next two to three to four years, I would fully expect within the store system, food with La Boulange as a catalyst, to be the No. 1 driver of comp growth as we go through the next few years. 

The article Starbucks CFO: Food Is a Huge Opportunity originally appeared on Fool.com.


Tom Gardner owns shares of Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may …read more

Source: FULL ARTICLE at DailyFinance

3 Great Cafe Stocks

By Andrew Marder, The Motley Fool

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I’m a coffee snob, and I don’t mean that in a pleasant way. I’m a jerk about it, and clearly, I’m unapologetic. But that isn’t going to stop me from keeping a close eye on the workings of the biggest prepared coffee sellers in the world. Taste-wise, these guys might be third-tier — seriously, there’s better coffee to be had — but business-wise, they’re top of the heap. Here are three companies that would pair well with almost any portfolio.

Dunkin’ Brands
While Dunkin’ Brands used to be known for just its doughnuts, the brand has expanded over the last decade, and now it’s a major player in the world of coffee. In its last quarter, Dunkin’ opened 256 new franchise locations around the world, and remodeled 205 other locations. While the company also operates Baskin-Robbins, it derives most of its revenue and income from Dunkin’ Donuts. The U.S. portion of Dunkin’ Donuts accounted for 81% of the company’s revenue last quarter.

The next big area for Dunkin’ is the international market. Last quarter, Dunkin’ Donuts only earned 3% of its revenue abroad, while the international portion of Baskin-Robbins brought in 11% of revenue. That shows that the company has the ability to manage overseas locations, it just needs to add more of them. Right now, the international push is costing the company, and those locations are running on a 54% profit margin, which compares poorly to the U.S. segment’s 74% margin.

This is a long-term growth story, with international locations increasing, under a suppressed margin. Then, as marketing backs off and those locations start to operate in a regular fashion, margins expand and everyone wins.

Panera Bread
If you want success in the here and now, you probably won’t do better than Panera Bread . The chain has been surging recently, driven by catering expansion and strong comparable sales growth. Last quarter, catering sales grew 19%, and the company has big plans for keeping that pace up. In-store, comparable sales grew 5% in company-owned locations. That was largely affected by increase in the average check, which was up 5.4%, driven by both product mix and price increases.

Over the next year, look for more of the same from Panera. The catering business is going to be an increasingly big deal, and the company is putting a lot of energy into making it efficient and profitable.

Starbucks
What else could possibly have been on this list? Starbucks is the reason that I can drink the kind of coffee I like — they made coffee fashionable. That hasn’t changed, and the company has had a great 12 months, with acquisitions and new product launches all over the place. Food is starting to play a larger role, and with the addition of a bakery in La Boulange, Starbucks is now in control of its own supply.

The next step is even more international expansion. The company is committing itself to expanding in …read more

Source: FULL ARTICLE at DailyFinance

1 Thing Starbucks Absolutely Has to Fix

By Demitrios Kalogeropoulos, The Motley Fool

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It’s an understatement to say that Starbucks has been doing some things right lately.

Valued at below $10 a share right after the financial crisis, the coffee champ posted a blockbuster recovery in a business that Wall Street had just about written off. Investors who held their shares were rewarded for their faith, though. The stock is now near $60 a share — up more than 500% since early 2009.

Here are a few examples of the stunning rebound in operating metrics that fueled Starbucks’ great run:

  • Profit margin: Since hitting a low in 2009, operating profit margin has more than tripled to more than 15% now. That’s a better than 10-year high for the company.
  • Comparable sales: After posting a 6% drop in comparable sales in 2009, growth has returned to Starbucks — with a vengeance. The company logged a 7%, 8%, and 7% increase in same-store sales for 2010, 2011, and 2012.
  • Operating cash flow: Starbucks is now swimming in cash. Annual cash flow has doubled in five years, climbing to a rate of more than $2 billion per year.

However, there’s one number Starbucks hasn’t managed to improve at all over the past three years. And it’s something that the company absolutely needs to fix if it wants to keep the great run going.

Feed me
We’re talking about food.

Take a look at Starbucks’ food sales as a percentage of the company’s total sales for the past three years.

Item

2012

2011

2010

Food

19%

19%

19%

Source: Starbucks financial filings.

Beverages account for the lion’s share of Starbucks’ sales. And after ticking up by 1 percentage point in 2009, and by another in 2010, the fraction of sales that Starbucks gets from food has been stuck at 19%. That’s not too surprising, considering the limited food options available at most locations.

And that’s too bad, because food could drive major growth at Starbucks. For an idea of that growth potential, take a closer look at Panera‘s results. The baker clocks weekly sales of more than $45,000 for each of its bakery-cafes, boosted by a healthy midday business and super-high check averages. And its large food menu has helped ignite comparable-store sales increases lately. For example, last year Panera’s menu mix changes added 3% to the company’s sales growth.

It makes sense, then, that Panera is encouraged by its expansion into more of what you might consider restaurant-level food. The company has doubled down on those heftier food choices and has just added a new line of pasta options to its menu.

Of course, Starbucks isn’t blind to the potential that food brings to its business model. That’s one reason the company shelled out $100 million in cash last year to buy the La Boulange bakery brand. A Starbucks executive said at the time that the new brand would “help us expand day-parts, drive customer loyalty, and ultimately grow the overall business.”

Still thirsty
Sure, drinks have always been Starbucks’ strength, …read more
Source: FULL ARTICLE at DailyFinance

ADDING MULTIMEDIA Starbucks Introduces Innovative Cross-Channel, Multi-Brand Loyalty Program and Ann

By Business Wirevia The Motley Fool

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ADDING MULTIMEDIA Starbucks Introduces Innovative Cross-Channel, Multi-Brand Loyalty Program and Announces Global Social Impact Initiatives at Annual Meeting of Shareholders

Company Recognizes the Contributions of its 200,000 Global Partners (Employees) in Delivering Record Financial Performance and a 38% Total Return to Shareholders in Fiscal 2012, Reaffirms Long-Term Growth Targets

SEATTLE–(BUSINESS WIRE)– Howard Schultz, chairman, president and ceo of Starbucks Coffee Company (NAS: SBUX) , opened the company’s Annual Meeting of Shareholders by recognizing company partners (employees) and highlighting the company’s continuing robust operating performance. Schultz and other company executives announced a breakthrough innovation in Starbucks loyalty and rewards program, shared progress and future plans for its recent La Boulange, Evolution Fresh and Teavana acquisitions and offered a comprehensive overview of how Starbucks is using its global scale to create positive, local impact in the communities where it operates and where its partners and customers live and work.

Howard Schultz, chairman, president and ceo, acknowledges the more than 200,000 Starbucks partners (employees) worldwide for their contributions to the company’s ongoing success. (Photo: Business Wire)

Annual meeting highlights included:

  • Thanks and appreciation from company shareholders via webcast to the 200,000 Starbucks partners around the world who deliver the Starbucks Experience to over 70 million customers in 62 countries each week.
  • The announcement by Adam Brotman, chief digital officer, of an expansion of the company’s loyalty and rewards program, and an industry-first innovation that will enable customers to earn rewards for grocery channel purchases that can be redeemed in Starbucks retail stores and is expected to double the number of customers enrolled in the company’s programs in fiscal 2013.
  • Brotman also announced that Starbucks mobile payment platform is now generating over three million U.S. mobile payment transactions per week.
  • Blair Taylor, Starbucks chief community officer, announced the launch of a new nonprofit corporation with a $1 million seed grant to introduce job skills, leadership and apprenticeship programs to young people across the company’s multi-billion-dollar supply chain, and further expansion of the company’s support for U.S. manufacturing through an order for 100,000 ceramic mugs from a supplier in Ohio whose operations Starbucks helped expand through previous purchasing commitments.
  • A discussion by …read more
    Source: FULL ARTICLE at DailyFinance

Starbucks Introduces Innovative Cross-Channel, Multi-Brand Loyalty Program and Announces Global Soci

By Business Wirevia The Motley Fool

Filed under:

Starbucks Introduces Innovative Cross-Channel, Multi-Brand Loyalty Program and Announces Global Social Impact Initiatives at Annual Meeting of Shareholders

Company Recognizes the Contributions of its 200,000 Global Partners (Employees) in Delivering Record Financial Performance and a 38% Total Return to Shareholders in Fiscal 2012, Reaffirms Long-Term Growth Targets

SEATTLE–(BUSINESS WIRE)– Howard Schultz, chairman, president and ceo of Starbucks Coffee Company (NAS: SBUX) , opened the company’s Annual Meeting of Shareholders by recognizing company partners (employees) and highlighting the company’s continuing robust operating performance. Schultz and other company executives announced a breakthrough innovation in Starbucks loyalty and rewards program, shared progress and future plans for its recent La Boulange, Evolution Fresh and Teavana acquisitions and offered a comprehensive overview of how Starbucks is using its global scale to create positive, local impact in the communities where it operates and where its partners and customers live and work.

Annual meeting highlights included:

  • Thanks and appreciation from company shareholders via webcast to the 200,000 Starbucks partners around the world who deliver the Starbucks Experience to over 70 million customers in 62 countries each week.
  • The announcement by Adam Brotman, chief digital officer, of an expansion of the company’s loyalty and rewards program, and an industry-first innovation that will enable customers to earn rewards for grocery channel purchases that can be redeemed in Starbucks retail stores and is expected to double the number of customers enrolled in the company’s programs in fiscal 2013.
  • Brotman also announced that Starbucks mobile payment platform is now generating over three million U.S. mobile payment transactions per week.
  • Blair Taylor, Starbucks chief community officer, announced the launch of a new nonprofit corporation with a $1 million seed grant to introduce job skills, leadership and apprenticeship programs to young people across the company’s multi-billion-dollar supply chain, and further expansion of the company’s support for U.S. manufacturing through an order for 100,000 ceramic mugs from a supplier in Ohio whose operations Starbucks helped expand through previous purchasing commitments.
  • A discussion by Troy Alstead, chief financial officer, of region-by-region and individual segment performance for fiscal 2012 and a reaffirmation of the company’s fiscal 2013 revenue and EPS growth targets.
  • Schultz’s recognition of Starbucks 15-year business …read more
    Source: FULL ARTICLE at DailyFinance

Starbucks Taps Sephora Exec to Manage Brand

By Justin Loiseau, The Motley Fool

Filed under:

Starbucks has hired Sharon Rothstein, formerly a senior marketing executive at specialty beauty retailer Sephora, as its global chief marketing officer.

“Throughout our 42-year history, Starbucks has strived to innovate and exceed the expectations of our customers around the world,” said Chairman, President and CEO Howard Schultz in a statement today. He praised Rothstein’s ability to build the brand around the world with her “forward-thinking brand sensibility and global cross-channel marketing expertise.”

In addition to overseeing the Starbucks brand, Rothstein will also focus on the corporation’s “emerging brands,” including Seattle’s Best Coffee, Evolution Fresh, La Boulange, Tazo, and Teavana.

At Sephora, Rothstein was responsible for the company’s global brand positioning and digital transformation. She has also worked with Godiva, Starwood Hotels and Resorts, and Procter & Gamble. Reflecting on her new role, Rothstein was quoted as saying, “There has never been a more exciting or important time in Starbucks journey to bring my passion for elevating the customer experience to this iconic global brand.”

She will officially assume her new role on April 15.

The article Starbucks Taps Sephora Exec to Manage Brand originally appeared on Fool.com.

Fool contributor Justin Loiseau has no position in any stocks mentioned. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.
The Motley Fool recommends Procter & Gamble and Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Starbucks Names Sharon Rothstein Global Chief Marketing Officer

By Business Wirevia The Motley Fool

Filed under:

Starbucks Names Sharon Rothstein Global Chief Marketing Officer

SEATTLE–(BUSINESS WIRE)– Starbucks Coffee Company (NAS: SBUX) today announced that it has appointed Sharon Rothstein as global chief marketing officer. Rothstein was previously senior vice president of marketing at innovative specialty beauty retailer Sephora.

Sharon Rothstein (Photo: Business Wire)

“Throughout our 42-year history, Starbucks has strived to innovate and exceed the expectations of our customers around the world,” said Starbucks chairman, president and ceo Howard Schultz. “Sharon’s forward-thinking brand sensibility and global cross-channel marketing expertise will continue to push us toward our aspiration of building one of the world’s most relevant, trusted and enduring brands.”

Rothstein will report to Schultz and serve on Starbucks senior leadership team. She will steward the Starbucks brand as well as the company’s portfolio of emerging brands, including Seattle’s Best Coffee, Evolution Fresh, La Boulange, Tazo and Teavana.

“There has never been a more exciting or important time in Starbucks journey to bring my passion for elevating the customer experience to this iconic global brand,” Rothstein said. “I have been a loyal Starbucks customer and fan for most of my adult life and I am humbled to become a partner (employee) at one of the few companies in the world that embraces the value and responsibility of balancing business performance and social impact.”

As the senior vice president of marketing at Sephora since 2009, Rothstein authored the company’s new global brand positioning, elevated the brand’s image and executed multi-channel integrated marketing campaigns. She also played a key role in transforming Sephora’s digital experience with immersive content across all digital channels. Prior to Sephora, Rothstein held senior marketing and brand management positions with Godiva, Starwood Hotels and Resorts, and Procter & Gamble.

Rothstein earned her MBA from the University of California, Los Angeles and her Bachelor of Commerce from the University of British Columbia. She will start on April 15 and will be based at the Starbucks Support Center in Seattle.

About Starbucks Corporation

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest-quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, …read more
Source: FULL ARTICLE at DailyFinance

Starbucks: Global Coffee Giant has new Growth Plans

By Walter Loeb, Contributor There is a lot of excitement emanating from the Seattle based coffee giant. Just three weeks ago a new blend of coffee called blonde roast was introduced. This should attract new customers who prefer a lighter blend. In addition there is more food for breakfast and lunch including more baked goods coming soon due to the company’s acquisition of La Boulange, and juices too with Evolution Fresh.
Source: FULL ARTICLE at Forbes Latest