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BenzingaEditorial

A Lesson From Starbucks

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Starbucks News

Gourmet beverages might belong to the category of cheapest luxury goods, but these manufacturers suffered this year along with the overall economy. Even leaders such as Starbucks (NASDAQ: SBUX) and PepsiCo (NASDAQ: PEP) saw significant sales declines as soon as lockdowns took place, but they managed to crawl out from the mess.Starbucks specifically has taken coffee to the next level with 32,000 cafes across the globe. So, what did Starbucks do that helped it stay afloat?

The effect of a global pandemic

Starbucks revealed COVID-19 made it lose $1.2 billion in sales as an impact of limited operations, reduced hours as well as closures. This year, the US coffee chain saw everything but its typical quarter where sales and comps both score notch high growth numbers as they bottomed out at as low as a 65% decline during the company’s third quarter.

Competitors

For now, the coffee giant does not really have a real competitor be threatened by. Dunkin’ Brands’ (NASDAQ: DNKN) Dunkin’ Donuts stores and McDonald’s (NYSE: MCD) do both sell coffee. Moreover, McDonalds announced last week it plans to spend approximately $381.6 million in the Chinese coffee market over the next three years via its coffee brand McCafé. By 2023, 4,000 McCafé outlets should be up and running on the Chinese mainland so coffee wars might intensify in the near future.

Although the controversial Luckin Coffee Inc (OTC: LKNCY) did shake its ground in China, there isn’t another retail chain anywhere the size of Starbucks that only focuses on beverages. Both Dunkin’ and McDonald’s trail behind Starbucks in sales and Luckin is still grappling with a fraud controversy despite its stock surge.

The right “recipe”

Since COVID-19 started its relentless march across the globe, Starbucks aggressively defended its top position by opening more drive-thrus, giving salespeople point-of-sale devices for quick transactions, and focusing on suburban store openings. Last week, it announced it is raising wages for its baristas of at least 10% starting December 14th. Starbucks is already known for giving its workers more generous benefits and pay compared to its peers in the restaurant industry.

The secret weapon – the mobile app

In September, the coffee giant launched a new loyalty program in September that offers an enhanced shopping experience as well as rewards for members. Those same members that account for a large chunk of sales.

It’s been five years since Starbucks rolled out the ability to place orders using its mobile app. Customers are loving this feature as it is as good as it gets to benefit from the customized Starbucks experience. The company rolled out mobile payments already in 2011, letting customers link a Starbucks card to the app to pay for their orders. This ended up being a brilliant strategy that more than paid off during the pandemic which demanded a ‘contactless’ service. Moreover, it made Starbucks’s app the most popular mobile payment processor as it’s sometimes even more used than Apple’s (NASDAQ: AAPL) ApplePay, according to e-Marketer. Starbucks revealed that almost one quarter of total orders in its stores come from the mobile app.

Results

Despite the difficult environment, the coffee giant managed to exceed expectations with its last reported quarter largely because of a decision it made years ago. Analysts had expected Starbucks to earn $6.06 billion, but despite the pandemic having reduced its customer traffic, revenue for the quarter ended up being $6.2 billion. Adjusted EPS of 51 cents also exceeded Bloomberg’s estimate of 31 cents.

While the pandemic is still raging over many parts of the globe, the worst seems to be behind. Starbucks did see a 9% revenue drop in the fourth quarter ended on September 30th, but it’s been improving quarter to quarter while topping estimates every time.

Due to the global health and consequent economic crisis, Starbucks has seen its revenues fall 11% YoY to $23.5 billion during FY 2020 that ended in September. But, it managed to beat earnings expectations with EPS of $0.79 while reporting a cash inflow of $1.6 billion from operating activities.

FY 2021

Starbucks is forecasting double-digit growth in fiscal 2021 as it aims to regain everything it lost in 2020 while moving forward. Earnings were already positive in the fourth quarter and sales are already positive in its second fastest-growing market- China. Trefis expects Starbucks’ revenues to recover after this unprecedented year and rise by 21%, in the range between $28 billion to $29 billion. Its net income is likely to follow the positive trend of recovery as it is estimated at $3.7 billion, with the expected EPS of $3.17.

Outlook

Even the business that were able to stay open during the pandemic felt the pain of those that were forced to close their doors. Everyone who survived had to quickly figure out how to make drastic changes to the way they served their customers while protecting their employees from the virus. Remarkably, Starbucks managed to keep going after a very harsh reality check. Five years after it launched its mobile app, it ended up being ‘saved’ by this feature. This story only shows that being focused at constantly improving the customer experience never gets old. The lesson is simple: what was good for the customer ended up being very good for the business.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

This Week’s Recap

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The market and the economy continue to open, which is probably a result of bottled-up demand for many products and services affected by the pandemic. Maybe the inflation or rising bond yields will trigger the selloff on the market at some moment, but the current Fed’s transitory inflation message has been accepted by many investors. Also, the best way to deal with inflation is to stay with your investments and keep your faith in the market. So, despite the jump of May’s consumer-price index, that did not affect the investors who adopted a different mindset, so all three major averages finished in a positive zone.

The Dow Jones Industrial Average managed to recover from one of the steeper declines, thanks to gains from companies like IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT), and Salesforce (NYSE: CRM). The Nasdaq Composite Index has also risen 49.09 points to 14,069.42. The tech-heavy index continued with the positive run, led by DocuSign (NASDAQ: DOCU), Zoom Video (NASDAQ: ZM), and CrowdStrike (NASDAQ: CRWD).

Tuesday brought us an earnings report from Oracle

Although it was a slim week for the earnings reports, Oracle (NYSE: ORCL) announced its last quarter results, as well as plans and guidance. The results are better than expected, as the achieved revenues were $11.23 billion (compared to the expected $11.04 billion) and the achieved adjusted earnings of $1.54 per share (compared to the expected $1.31). On the other hand, the company revealed its quarterly revenue guidance, which is lower than expected due to the plans to increase investments to support its cloud strategy and keep migrating existing on-premises customers to the cloud. This all led to a share fall of 5%, as many investors are skeptical if Oracle can successfully compete with major “cloud” players like Amazon (NASDAQ: AMZN), Salesforce, or Workday (NASDAQ: WDAY).

Adobe reported impressive results on Thursday

The Wall Street analysts recognized the work-from-home trend and this second digitization era as the main reasons for Adobe’s (NASDAQ: ADBE) sustained growth and therefore a monster quarter. And they were right. The company reported revenues of $3.84 billion, which is an increase of 23% compared year to year. That is also above the Wall Street estimate of $3.73 billion. The digital media business revenues, consisting of Creative Cloud and Document Cloud, grew by 25% compared to the previous year. The adjusted earnings per share were $3.03, which is higher than the estimated $2.81. For the following quarter, the company expects revenues of $3.88 billion and adjusted earnings per share of $3.00.

Conclusion

All these factors taken together, proven by positive index movements and earnings results better than anticipated, support the fact that the economic recovery is firmly underway, and those are very encouraging news.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Several new earnings reports and more management presentations this week

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We might be witnessing the lower volume of quarterly earnings reports this week, but that only means we passed last quarter’s report peak and we are getting ready for the June-quarter earnings season, which will hit us not long after the 4th of July. However, we do not lack many management presentations, which are typical after announcing earnings reports. This week brings us news for future result expectations from more than 30 companies, so let’s try and not miss any important clues. Besides earnings reports, this week is bringing us a total of 9 new IPOs like Marqeta, Inc. (NASDAQ: MQ), TaskUs, Inc. (NASDAQ: TASK), LifeStance Health Group, Inc. (NASDAQ: LFST), monday.com Ltd. (NASDAQ: MNDY), Zeta Global Holdings Corp.(NYSE: ZETA) and Jaws Hurricane Acquisition Corp (NASDAQ: HCNEU).

Monday

Yesterday we saw the first quarter report of fiscal 2022 for Marvell Technology (NASDAQ: MRVL), a Delaware-based company that develops and produces semiconductors and related technology. Marvel Technologies reported new revenues of $832 million, which is an increase of 20% year-to-year. GAAP gross profit margin was 50.2% and non-GAAP gross margin was 64.3%, while GAAP diluted loss per share was $0.13 and non-GAAP diluted income per share was $0.29.

Also, Vail Resorts, Inc. (NYSE: MTN) which owns and operates several premier mountain resorts in Colorado and California, reported fiscal 2021 third-quarter results yesterday. The report showed a net income of $274.6 million which is an increase of 80% compared to the third fiscal quarter of 2020. The reported EBITDA was $462.2 million, which is a significant increase from last year same quarter’s $304.4 million.

Tuesday

Besides earnings reports from Navistar International (NYSE: NAV) and Calavo Growers (NASDAQ: CVGW) on Tuesday, we are also expecting reports from Thor Industries (NYSE: THO), Casey’s General Stores (NASDAQ: CASY), and ABM Industries (NYSE: ABM).

Wednesday

Wednesday is reserved for earnings reports from Brown Forman (NYSE: BF-B), United Natural Foods (NYSE: UNFI), and Restoration Hardware (NYSE: RH). RH, the California-based furnishing company is expected to report earnings of $3.99 per share, which is growth of over 214% compared to the same period last year. Also, GameStop Corp (NYSE: GME), one of the world’s largest video game retailer’s earnings report is expected on Wednesday. The expected loss for the first quarter is $0.68 per share, which is an improvement from the same period last year (-%1.61 per share). In order to accelerate its transformation, the company decided to restructure its board, so it can keep up with industry growth and company expansion in the digital arena.

Thursday

On Thursday, we expect to see reports from National Beverage (NASDAQ: FIZZ), Chewy (NYSE: CHWY), and Dave & Buster’s (NASDAQ: PLAY). Chewy, the Florida-based pet store retailer, is expected to report a quarterly revenue growth of over 125%, compared year over year.

Friday

We are not expecting any major earnings reports on Friday.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

The week may be starting slowly but do not let that mislead you

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The celebration of Memorial Day in the U.S. caused the slower start, but the rest of the week will bring us plenty of news, updates, and earnings reports from companies like Zoom Video Communications (NASDAQ: ZM), Hewlett-Packard Enterprise (NYSE: HPE), Advanced Auto Parts (NYSE: AAP) and Slack Technologies, Inc. (NYSE: WORK). This week will also bring us news from the EV and the IPO worlds, as well as the 2021 Bitcoin conference, one of the biggest cryptocurrency events this year. Before we move to the day-to-day highlights, if you are a small business owner, do not miss today’s deadline to apply for the latest round of the Paycheck Protection Program funding.

Tuesday

This week’s earnings reports will be led by Kirkland’s Inc (NASDAQ: KIRK), and that is due before the market opens. It will be followed by HP’s and Zoom’s earnings reports, after the bell. SoFi Technologies (NYSE: SOFI) is a fintech startup IPO joining the trading world after its SPAC merger on Friday.

 

Wednesday

Before the market opens on Wednesday, we are expecting the earnings reports from Advance Auto Parts and Lands’ End Inc (NASDAQ: LE). The reports will keep coming after the bell as well, so we are keen to see how NetApp Inc (NASDAQ: NTAP), Endeavor Group Holdings (NYSE: EDR), Splunk Inc (NASDAQ: SPLK), and PVH Corp (NYSE: PVH) did in the previous period. Wednesday is also the day when we are expecting the Beige Book, which will give us the latest analysis of the economic conditions in the U.S. as the COVID-19 restrictions reduce.

Thursday

Thursday is expected to be the busiest of the week, when we expect earnings reports from Express Inc (NYSE: EXPR), Asana Inc (NYSE: ASAN), Duluth Holdings Inc (NASDAQ: DLTH), Broadcom Inc (NASDAQ: AVGO), The Toro Company (NYSE: TTC), The Cooper Companies (NYSE: COO), Science Applications International Corporation (NYSE: SAIC), Lululemon Athletica (NASDAQ: LULU), as well as Slack Technologies.

Thursday is a big day for NVIDIA Corporation (NASDAQ: NVDA) also. After reporting the record profits and earnings, highly affected by the company’s revenues from graphic cards for crypto mining, the shareholders will vote on a 4-for-1 stock split. That will increase the number of authorized shares of common stock, and if approved, each shareholder will receive an additional dividend of three additional shares.

Thursday will be also interesting in the automotive world. Kia will start taking reservations for its new EV6 crossover, while Nio Inc (NYSE: NIO), the Chinese automaker, will hold a general meeting so it can increase the diversity of its board.

This day will also be dominated by cryptocurrencies, as the 2021 Bitcoin conference, taking place in Miami, will kick-off.

Friday

The week’s end is reserved for the earnings report from Hooker Furniture Corporation (NASDAQ: HOFT), and that is expected before the opening bell. During the rest of Friday, we will focus on the latest unemployment rates and data.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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