Why Has Starbucks Risen To $90?

Starbucks (NASDAQ: SBUX), the world’s renowned coffee company, has seen its stock rise at a CAGR of 13.9% to $90 in a span of 4 years. Meanwhile, a close competitor, Dunkin’ Brands, has seen its stock grow by a CAGR of approximately 10.2%, while the S&P index itself has grown at a CAGR of approximately 9.5%. In this analysis, Trefis takes a look at some of the trends that drove the expansion in the company’s stock price.

View our interactive dashboard analysis – Why Starbucks rose by more than 66% in 4 years? In addition, here is more Consumer Discretionary data. 

Starbucks Revenues increased 1.3x in the last 4 years:

• Starbucks’ revenue has seen continuous increase over the last 4 years and Trefis estimates it to continue in 2019.
• Revenue has increased from $19.2 billion in 2015 to $24.7 billion in 2018.

Continuous growth in Number of Total Stores over the years:

• Starbucks Total stores has also seen a tremendous growth over the years as it increased from 23K in 2015 to 29.3K at the end of 2018.
• Total Stores crosses 30K barrier in Q2 2019 (ended March 2019).

Company Owned Stores grew by a CAGR of 7.8% led by Asia-Pacific region:

• Number of company operated stores has increased steadily over the years. From 12.2K in 2015 to 15.3K in 2018.
• The high increase in 2018 is because 1,477 Licensed Stores in China were converted to Company owned stores as evidenced by the sudden jump in Asia-Pacific region, too (3,070 in 2017 to 5,159 in 2018).
• EMEA region’s focus is on licensed stores so we are seeing a decline in company owned stores for the same.
• Americas has seen a steady increase of company owned stores from 8,671 in 2015 to 9,684 in 2018.

EMEA region led the growth for Licensed stores by growing at a CAGR of 20.3%:

• Number of licensed stores has increased steadily over the years but in 2018 we saw a small fall as 1,477 Licensed Stores in China were converted to Company owned stores as evidenced by the sudden decline in Asia-Pacific region, too (4,409 in 2017 to 3,371 in 2018).
• EMEA region’s focus has shifted to licensed stores so we are seeing a good increase, i.e. 1,625 in 2015 to 2,830 in 2018.
• Americas has seen a steady increase of licensed stores from 6,132 in 2015 to 7,770 in 2018.

Improvement in Revenue per store:

• Average revenue per Company owned store has seen a steady increase from $1.32 million in 2015 to $1.38 million per store in 2018.
• Average revenue per Licensed store has been fluctuating over the years. It has increased from $173.5K in 2015 to $189.1K per store in 2018.

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