Must-know: An overview of Starbucks' 3Q14 (Part 1 of 10)
Overview of Starbucks
Starbucks Corporation (SBUX) was formed in 1985. It sells handcrafted coffees, other beverages, and food items at its company-operated stores. Starbucks also sells its products through grocery and licensed stores. Along with its branded products, Starbucks sells items under brands such as Tazo, Starbucks VIA, Teavana, Evolution Fresh, Seattle’s Best Coffee, Verismo, and La Boulange. In the quarter ending June, 2014 Starbucks had 10,515 company-operated restaurants and 10,348 licensed stores.
Earnings per share
Starbucks’ third quarter earnings were released on June 24, 2014. It reported adjusted earnings per share (or EPS) of $0.67. EPS increased by 21%, compared to an EPS of $0.55 in the same quarter last year. The increase was due to an 11% increase in top line and a 23% increase in net income. The weighted average shares were unchanged over the same period.
Starbucks competes with other famous brands like Dunkin’ Donuts (DNKN). DNKN reported a diluted EPS of $0.44—up 15% compared to an EPS of $0.38 in the same quarter last year. Starbucks also faces competition from McDonald’s (MCD). MCD has entered the breakfast segment by serving coffee and breakfast items. McDonald’’s reported an EPS of $1.40—up 1.4% compared to an EPS of $1.38 in the same quarter last year.
An investor who would like to invest in the restaurant industry as a whole can invest in exchange-traded funds (or ETFs) like the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Food & Beverage ETF (PBJ).
Topics discussed in this quarterly overview
In this quarterly overview series for Starbucks, we’ll take a deeper look into the earnings. We’ll also look at the key value metrics such as same-store sales, impacts of costs, how the market reacted to the earnings, and Starbucks year-to-date (or YTD) stock performance.
Browse this series on Market Realist: