Companies and Brands
Are Starbucks 15,000 American Stores Too Few?
Published:
Last Updated:
Starbucks has opened stores in the Americas region at a brisk pace. According to its most recent earnings statement:
Net revenues for the Americas segment were $4.0 billion in Q1 FY17, an increase of 7% over Q1 FY16. The increase was driven by incremental revenues from 884 net new store openings over the past 12 months and 3% growth in comparable store sales.
Despite this grow, overall earnings for the company were considered inadequate particularly for its most recent fiscal quarter, which ended January 1
Q1 Fiscal 2017 Highlights:
Global comparable store sales increased 3% comprised of a 3% increase in the Americas, a 5% increase in CAP, and a 1% decrease in EMEA
U.S. comparable store sales increased 3% comprised of a 5% increase in average ticket and a 2% decrease in transactions. Adjusting for the estimated impact of order consolidation related to the new Starbucks RewardsTM loyalty program, average ticket grew 3% with transactions flat to prior year.
Record consolidated net revenues of $5.7 billion grew 7% over prior year
Record Q1 consolidated operating income increased 7% to $1.1 billion
Record Q1 consolidated operating margin expanded 10 basis points to 19.8%
GAAP EPS of $0.51 increased 11% over Q1 FY16
According to Reuters, the core of the problem was not just sales as reported in the press release:
Starbucks Chief Operating Officer Kevin Johnson told Reuters the disappointing Americas results were primarily due to operational challenges caused by congestion at drink pickup sites after the number of cafes reaping more than 20 percent of transactions from mobile orders doubled to 1,200 during the fiscal first quarter, which ended Jan. 1.
If sales are going to continue to grow, Starbucks may need more places to pick up coffee
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.