Starbucks finds gold in drive-up windows
The stores with drive-up servce are far more profitable than ones without. So the coffee giant is adding the windows to most of the 1,500 US stores it expects to open over the next 5 years.
The experience was not meant for those crazies who zoom up to the drive-up window at, say, McDonald's (MCD), Wendy's (WEN) or Dunkin' Donuts (DNKN), get their coffee to go and roar back out into traffic.
But times have changed for Starbucks. The company has figured out that a drive-up window makes for a more profitable store.
So, the coffee giant will offer drive-up service at some 60% of the 1,500 stores it expects to add in the United States over the next five years.
Just how profitable are drive-ups? Starbucks stores with drive-up windows account for 30% of the U.S. total, CEO Howard Schultz noted on the company's conference call last week. But they produce 45% of U.S. retail profits. And, since Schultz and his team aren't stupid, they're going to go with the trend.
Starbucks did have a fine fiscal first quarter. Revenue reached $3.8 billion, up 11% from a year earlier. Comparable-store sales were up 6%, with 2% due to higher prices and 4% due to more traffic. In the U.S., same-store sales were up 7%. In China and the Asia/Pacific region, same-store sales were up 11%. Earnings per share rose 14% to 57 cents a share.
Starbucks has bought Teavana Holdings, a key element in its drive to become a global leader in tea. It opened its first store in India and its 100th store in Beijing.
The shares were off 74 cents to $56.08, but they're up 4.6% for the month. That's a touch better than the Nasdaq Composite Index's ($COMPX) 4.5% gain this month and the 3.1% gain for the Nasdaq-100 Index ($NDX), which is up 3.1%.
But it is lagging the Standard & Poor's 500 Index ($INX), which is up 5.2% for the month and held above 1,500 for a second day in a row on Monday. Starbucks is also lagging the Dow Jones Industrial Average ($INDU), up 5.94%. The Dow, in fact, appears headed to its best January performance since 1994.
More on moneyNOW
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the Thursday session on a mixed note ahead of Friday's nonfarm payrolls report for February (Briefing.com consensus 163K). The Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.2%) posted modest gains while the Nasdaq Composite (-0.1%) lagged throughout the session.
Equities began the trading day on an upbeat note following comments from the Bank of England and the European Central Bank, both of which reaffirmed their commitment to ... More
More Market News
Consumers are very status conscious in Asia, Africa and other emerging-market areas. This is especially true in China.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'