Starbucks Offers Free Shipping

November 4, 2016 by Douglas A. McIntyre

No need to visit Starbucks to get bags of coffee and mugs. It sells those products online. Like major retailers, it has gotten into the free shipping business, for orders of $30 or more.

The shipping is what Starbucks Corp. (NASDAQ: SBUX) calls “standard,” so customers will need to wait awhile for their orders. “Free shipping” is four to eight days. Order early, as a week is a long time. For two business days, it is $14.95. For one business day, $24.95.

The items people will pay to ship include most Starbucks coffee options, which sell for $14 to $25 a package. Many of Starbucks mugs and cups won’t qualify for free shipping either, although the White Double Wall Traveler adorned with Swarovski crystals costs $74.95.

Incidentally, Starbucks did just release its fiscal fourth-quarter earnings report, which shows free shipping won’t dent its momentum:

  • U.S. comparable store sales increase of 4% was comprised of 6% increase in average ticket and 1% decrease in traffic. After adjusting for the estimated impact of order consolidation related to the new Starbucks Rewards™ loyalty program, average ticket grew 4% and traffic grew 1%.
  • Consolidated net revenues grew 16% to $5.7 billion
  • Consolidated operating income increased 27% to $1.2 billion
  • Consolidated operating margin expanded 180 basis points to 21.5%
  • GAAP EPS increased 26% to $0.54 per share and included $0.06 related to the extra week in Q4 FY16
    • Non-GAAP EPS of $0.56 included $0.06 related to the extra week in Q4 FY16. Excluding the extra week, non-GAAP EPS of $0.50 grew 16% over Q4 FY15 non-GAAP EPS
  • Non-GAAP EPS of $0.56 included $0.06 related to the extra week in Q4 FY16. Excluding the extra week, non-GAAP EPS of $0.50 grew 16% over Q4 FY15 non-GAAP EPS
  • The company opened 690 net new stores in the quarter, bringing total stores to 25,085 in 75 countries worldwide
  • Mobile Order and Pay represented 6% of U.S. transactions in the quarter, up from 5% in the prior quarter

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