Starbucks serves tasty Q3 results as profit rises 25%
Seattle — Starbucks Corp. reported strong results for third quarter fiscal 2013, with net revenues, same-store sales and operating income all increasing substantially from the same quarter a year earlier.
Net earnings grew 25%, from $333.1 million to $417.8 million.
Net revenues totaled about $3.7 billion, up 13% from $3.3 billion. Same-store sales increased 8% globally, driven by 9% growth in U.S. stores.
In addition to generally strong same-store sales, Starbucks also helped drive revenues with the opening of 1,558 net new stores since the third quarter of the previous fiscal year, including 596 in the Americas segment. The company opened 341 net new stores during the quarter and now operates 19,209 stores globally.
Other highlights of the quarter included a strategic agreement with Danone to jointly produce yogurt products; sale of company equity in stores in Chile and Argentina to business partner Alsea; expansion of a long-term strategic partnership with Green Mountain Coffee Roasters for the manufacturing, marketing, distribution and sale of Starbucks- and Tazo-branded single-serve Keurig packs; expanding the number of stores selling La Boulange bakery products to 1,076; and making changes to the senior leadership team.
“Starbucks third-quarter results represent the best across-the-board third-quarter performance in our 42-year history,” said Howard Schultz, chairman, president and CEO. "Our more than 19,000 store global footprint, our fast-growing CPG presence and our best-in-class digital, card, loyalty and mobile capabilities are creating a ‘flywheel’ effect elevating the relevancy of all things Starbucks, and driving profitability.”
During fiscal 2014, Starbucks anticipates revenue growth of approximately 10% to 13%, mid-single-digit same-store sales growth and the opening of 1,400 net new stores including 600 in the Americas.
Report: A&P plans to sell company
New York – The Great Atlantic and Pacific Tea Co. (A&P), which exited bankruptcy last year, is reportedly looking to sell itself. A report in the Wall Street Journal indicates that an internally distributed company memo from A&P chairman Gregory Mays to store managers states a sale of A&P is one of several options for funding growth, along with raising capital and refinancing.
However, the report quotes an anonymous source as saying a sale is the most likely option.
The report lists buyout firm Cerberus Capital, as well as grocery conglomerates Kroger and Ahold, as possible bidders in the event of a sale. A&P reportedly may be valued at $1 billion or more. The company has not publicly responded to the report.
Build-A-Bear narrows Q2 loss
St. Louis — Build-A-Bear Workshop narrowed its second-quarter loss to $6.2 million from $7.5 million in the year-ago period, boosted by improved sales and store productivity.
Total revenues were $81.9 million , up 1.9% from the $80.4 million reported in the second quarter of 2012. Same-store sales rose 7.3%, including an 8.6% increase in North America and 1.7% increase in Europe. E-commerce sales rose 5.2%.
“We continued to show progress in the second quarter with increased comparable-store sales, growth in total sales on a lower store count and expansion in gross profit margin, as compared to last year,” said Sharon Price John, CEO of Build-A-Bear. “Our brand marketing, product and real estate initiatives led to our third consecutive quarter of positive comparable-store sales in North America. This, along with a reduction in promotional activity, resulted in improved operating performance for the quarter and first half of the year."
During the quarter, the company closed 10 stores to end the period with 323 company-owned store, with 263 in North America and 60 in Europe. Build-A-Bear also remodeled four stores in its new design format. The company’s international franchisees ended the quarter with 90 stores in 14 countries.
Looking ahead, Build-A-Bear continues to expect to close an additional 20 to 35 stores in fiscal 2013 and 2014, along with limited, opportunistic store openings, to reach its optimal store count of 225 to 250 stores in North America. These select store closures are expected to transfer approximately 20% of sales to other stores in the same markets, which is consistent with the average transfer rate of the stores closed since 2012.