Jun. 30, 2014, 7:07 AM
- A jump in beef prices has restaurant operators scrambling to avoid taking a hit on margins this year.
- While Chipotle has been able to pass on higher input costs to consumers, most chains are seeing consumer push back on price hikes.
- A new twist" Fast-food chains Carl's Jr. and Hardee's have introduced smaller-sized sandwiches to its menu to try to keep profits intact.
- Related stocks: CAKE, CBRL, CMG, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
- Previous: Beef prices could pressure restaurant margins
Jun. 20, 2014, 12:30 PM| 5 Comments
Jun. 19, 2014, 2:26 PM
- UBS raises profit estimates on Starbucks (SBUX +2%) for FY14 ($2.67 from $2.65) and FY15 ($3.16 from $3.11).
- New initiatives, product roll-outs, and global growth channels all look set to deliver as promised, reasons the investment firm.
- UBS on SBUX: "Starbucks remains among the best positioned restaurant names over the medium to long-term, with several enablers supporting a +10% top line, +15- 20% EPS growth."
Jun. 17, 2014, 6:57 AM
- Coffee output in India is forecast to rise after suffering a setback last year.
- Higher production from the region could increase global supply to pressure prices after a drought in Brazil has had major impact on the coffee market.
- Prices on bagged coffee has been increased by a wave of companies including J.M. Smucker and Kraft Foods.
- Wholesale coffee prices still have a big wildcard in the mix with the emergence of El Nino.
- Related stocks: SJM, KRFT, THI, SBUX, GMCR, MCD, JVA, KRFT, DNKN.
- Related ETF: JO
Jun. 12, 2014, 8:24 AM
- Starbucks (SBUX) is expected to announce today a national roll-out of wireless charging stations at its stores and Teavana outlets.
- The company is partnering with Duracell Powermat (PG) on the initiative.
- The marketing mavens working for Starbucks say the strategic move to eliminate the power cord in the charging process will strengthen the reputation of its brand as tech-friendly.
Jun. 11, 2014, 3:23 PM
- Execs with Starbucks (SBUX +0.3%) presented today at the William Blair & Company Growth Stock Conference
- EPS growth of 20% to 22% is forecast.
- The company expects to have 1.5K stores in China by the end of the year.
- Sales have improved at every 2-hour interval of the day with the 11:00 a.m.-1:00 p.m and 1:00 p.m.-3:00 p.m. windows showing the strongest pace of comp sales gains.
- Offering beer and wine at stores has lifted the average ticket level at participating stores.
- CFO Scott Maw notes tea is a bigger market than coffee and is growing at a faster pace. Tea opportunities could broaden as tea concept stores in the U.S. draw notice.
- "Significant innovation is on the docket," says management. Look for the trend of 1% to 2% of comp growth from innovation to continue at Starbucks.
- Express ordering via mobile app is on the agenda. Testing is ongoing.
Jun. 11, 2014, 2:11 PM
- A new coffee service app from an Israeli start-up did a soft launch in New York City with positive early results.
- The $45-per-month Cup service gives subscribers unlimited purchases of basic coffee and tea drinks at the 40 participating independent shops. A premium service at $85 per month opens the door for premium espresso and latte drinks.
- Both Starbucks (SBUX -0.4%) and Dunkin' Brands (DNKN -0.6%) have 10X the number of locations that Cup has under its fold so far.
- The firm's goal is to expand out of NYC in the future.
Jun. 11, 2014, 1:57 AM
- The European Commission is preparing an investigation into the corporate tax codes in Ireland, Luxembourg and the Netherlands. The probe is examining the low tax rates global companies pay in the three countries, and will make known if their tax deals are allowed under EU law, or amount to illegal state aid.
- If the investigation reveals that multinational corporations received the state aid, the commission could obligate them to pay it back, even though such requirements are uncommon.
- The probe comes after yesterdays news that Apple used Irish tax laws to allow it to pay just a 3.7% tax rate on non-U.S. income during its last fiscal year. Other companies that will be investigated include Amazon (AMZN), Google (GOOG, GOOGL) and Starbucks (SBUX).
Jun. 9, 2014, 1:46 PM
- Data from NPD Group indicates the average American spends 12 minutes a day on breakfast.
- The highly-contested daypart pits major cereal sellers such as Kellogg (K), Post Holding (POST), and General Mills (GIS) against fast-food chains like McDonald's (MCD), Starbucks (SBUX), Taco Bell (YUM), and Dunkin' Brands (DNKN).
- Convenience-store chains are also a major factor as C-stores such as Circle K (ANCUF), 7-11, Pantry (PTRY), BP Connect (BP), On the Run (XOM), Speedway America (MPC), Kwik Shop (KR), and Qwiktrip continue to innovate and show some positive growth trends.
- What to watch: Analysis from Edward D. Jones suggests consumers tend to stay with their routines. The read is that companies in the breakfast business need to compete for market share within their segment - instead of trying to change consumer behavior. Taco Bell is utilizing that strategy with its marketing message which paints McDonald's as old-fashioned.
Jun. 2, 2014, 11:34 AM
- Improved traffic at restaurants chains in April helped boost the Restaurant Performance Index monitored by the National Restaurant Association by 0.3% to 101.7.
- The Expectations Index, which measures the six-month outlook for operators, improved 0.2% to 102.2 to mark the highest level for the index in two years.
- Restaurant stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN
May. 28, 2014, 9:09 AM
- Standpoint Research is out with Strong Sell ratings on Starbucks (SBUX), McDonald's (MCD), and Wal-Mart (WMT) on moral grounds.
- Analyst Ronald Moas has made a lot of noise on the issues of wealth redistribution and the unfair treatment of employees by corporate giants, but his rants have done little to move stock prices.
May. 27, 2014, 11:26 AM
- Starbucks (SBUX +2%) will open the doors to a fast-casual La Boulange restaurant in Los Angeles on June 12.
- The company already runs several La Boulange restaurants in San Francisco with early reviews largely positive.
- The outlet in L.A. will serve standard La Boulange fare until 7:00 p.m. after which time the menu will include croissant burgers, wine, and cocktails.
- The company hasn't been specific about the direction of the La Boulange brand. "You will see us experiment with La Boulange through various brand extensions," teases one Starbucks exec.
May. 27, 2014, 8:13 AM
- India's largest coffee chain with 1,650 outlets (and another 350 on the way), Cafe Coffee Day has begun interviewing investment bankers, reports Bloomberg, and could seek a valuation of about $1B. The offering could help the company extend its market share lead in India over rivals like Starbucks (SBUX) which opened its first store in that country less than two years ago.
- KKR invested in Cafe Coffee's holding company - Amalgamated Bean - in 2010.
May. 23, 2014, 11:05 AM
- Wells Fargo analyst John Baumgartner forecasts a continued drop in milk prices after seeing Class I milk peak earlier in the month.
- The news could be a relief for a number of companies (DF, WWAV, SJM, DF, NSRGY, LWAY, DNKN, MCD, SBUX, GIS, HSY, MJN, ADY) which have faced margin pressure over the escalated cost of wholesale milk products.
- Milk price chart
- Related ETF: MOO
May. 22, 2014, 1:15 PM
- Jamba (JMBA +3.9%) is rapidly accelerating the rollout of its fresh-juice initiative in order to stay ahead of rivals - in particular Evolution Fresh (SBUX).
- The company says 500 locations will have the fresh juice platform in place by June 2 and all stores will be covered by 2015.
- Consumer response has been very positive to Jamba's juicing pilot program, with participating stores showing a 3%-4% lift to their comp. Execs with Jamba are convinced they are catching a wave early.
May. 20, 2014, 10:21 AM
- Amazon (AMZN +1.7%) trades higher amid a tough day in retail.
- There's nothing concrete on the table, but some analysts think the company has been stealing some market share from major retailers in Q1 and Q2 as consumers continue to evolve their shopping habits. Staples (SPLS -10%) and Office Depot (ODP -1.5%) come to mind.
- Starbucks (SBUX -1.3%) CEO Howard Schultz seems to have called the retail slide with his perception that a "seismic shift" toward online and mobile is beyond the tipping point (FBN interview, SBUX conference call).
- Related ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, IYK, IYC, FXD, SCC, FDIS, UCC, RHS, PMR, FSTA, RCD, UGE, PSL, PEZ, PSCC, PSCD, SZK
SBUX vs. ETF Alternatives
Starbucks Corp is the roaster, marketer & retailer of specialty coffee in the world, operating in 65 countries. It sells a variety of coffee & tea products. It sells goods and services under brands under Teavana, Tazo, Seattle's Best Coffee, etc.
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