Is Starbucks Setting the Stage for 2013 Growth?

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By Dan Ritter | January 26, 2013 2:16 AM EST

Wall St. Cheat Sheet

Starbucks ( grew 14 percent to $0.57 per share, sharpened by a 40 basis-point increase in operating margins to 16.6 percent.

“Starbucks’ strong performance in Q1 demonstrates the strength, and unique resilience, of our increasingly global , and the power and growing relevance of the Starbucks brand to consumers and communities all around the world,” chief executive Howard Schultz said in tumbled below $45 before eventually recovering to about $55. In general, though, analysts remain very bullish on the stock partly because of the company’s ability to grow quickly and effectively.

Same-store sales grew 7 percent in the United States and 6 percent globally. This included 11 percent comparable growth in China/Asia Pacific, which are arguably regions with the greatest growth opportunities. Starbucks opened 125 stores in China/Asia Pacific in the quarter, four more than last year.

Same-region revenues grew 28 percent, while were close behind at a 26 percent growth. Margins moved up 60 basis points to 33.7 percent, by far the highest in any of its segments.

Starbucks is also advancing its K-Cup . Revenues were up 13 percent for the segment, while operating income climbed 24 percent on the back of a 230 basis-point increase in margins. This is sure to present a challenge for Green Mountain Coffee Roasters ( has been on a tear recently, and analysts are looking for $0.33 per share from the company. Dunkin has historically come in ahead of expectations.

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The article was first published by Wall St. Cheat Sheet and does not represent the views or opinions of International Business Times.

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