When Starbucks Corp. (NASDAQ: SBUX) announced second-quarter earnings, the coffee shop operator did well. But one thing was clear beyond its revenue and profits: Starbucks is no longer a growth company.
The major sign that Starbucks is not growing anymore is same-store sales that rose only 1% worldwide. Starbucks got a higher yield from customers, which was why its earnings rose.
Revenue increased 11% to $6.3 billion, while earnings rose 30% to $0.61 per share. Both were signs of health.
Starbucks would argue that growth should be measured by new store openings. Its net store additions, for what it labels as its third quarter, rose by 511 to 28,720. That increase is less than 2%.
The slowing of customer traffic to existing stores tells the story that customers with a Starbucks near them, or who travel to places that have one, have turned to alternatives for coffee or drink less coffee than they have in the past. In other words, it is likely that some Starbucks customers have turned elsewhere.
Starbucks CEO Kevin Johnson said:
Starbucks record performance in Q3 reflects successful execution against our strategic growth priorities and our commitment to deliver predictable, sustainable growth at scale – and meaningful increases in long-term value – for our shareholders. We remain confident in our global growth strategies, in the sustainability of our leadership position around all things coffee and tea and in our leadership teams around the world to navigate our next phase of growth.
The company’s numbers undermine his case.
Smart Investors Are Quietly Loading Up on These “Dividend Legends” (Sponsored)
If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.
Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
