Starbucks Sees Second-Quarter Profit Below Estimates on Higher Coffee Cost

Starbucks Corp., the world’s biggest coffee-shop operator, forecast second-quarter profit that fell short of analysts’ estimates as it projected paying more for coffee.

Net income will be as much as 33 cents a share, the Seattle-based company said today in a statement. Analysts expect 35 cents, the average of 18 estimates compiled by Bloomberg.

“We are seeing coffee cost increases alone which are penalizing our profit and loss in 2011 by about 20 cents per share,” Chief Financial Officer Troy Alstead said in a telephone interview.

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Starbucks Brews Plan to Enter India

India remains one of the big untapped markets for the Seattle-based coffee and food company. Chairman Howard Schultz said in an interview from Mumbai that India could one day rival China, where the company recently announced plans to more than triple the number of outlets to about 1,500 in five years.
India is "as large an opportunity as there exists in the world, coupled with China," he said.

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A look at the future of Starbucks

A look at the transition of the Starbucks logo

Dunkin Donuts comes out with new Ad Campaign

The new campaign, which includes print, TV, and digital ads, is the chain’s latest effort to one-up its biggest rivals, Starbucks and McDonald’s, in the java wars. The ads mostly feature everyday people who were picked as part of a nationwide casting call in November, which drew 1,000 people.

Among the ads’ pitchmen are two firefighters from Georgia who, when asked, “What are you drinkin’?’’ respond: “I’m drinkin’ Dunkin’.’’

Dan Saia, vice president of consumer engagement at Dunkin’ Donuts, a unit of privately owned Dunkin’ Brands Inc. in Canton, said the campaign is designed to let real customers tell the Dunkin’ Donuts story.

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Starbucks Deal With Kraft Costs It Potential Grocery Store Sales

Starbucks Corp., the world’s largest coffee chain, will miss out on a surge in home-brewing unless it can break a 13-year-old deal that ties its fortunes to Kraft Foods Inc.’s slow-selling Tassimo machine.

Under the terms of the deal, Starbucks can’t put its coffee in the Keurig Home Brewer, according to a complaint from Kraft filed in federal court in White Plains, New York. Kraft’s brewing system has 2.6 percent of the grocery market; Keurig, which dominates the U.S. market for machines that make single cups of coffee in a minute or less and is owned by Green Mountain Coffee Roasters Inc., has 71 percent.

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Kraft Challenges Starbucks Attempt to End Coffee Distribution Agreement

Kraft Foods Inc. said it would challenge Starbucks Corp.’s attempt to end a retail grocery coffee-distribution agreement between the two companies and has initiated an arbitration proceeding.

To end the deal Starbucks must compensate Northfield, Illinois-based Kraft for the “fair market value” of the business, plus possibly a premium of as much as 35 percent of that value, Kraft said today in a statement.

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Can Italian Coffee Major Push Starbucks Into A Corner?

There has been a widespread wall street optimism especially in the Food and Beverage sector after Starbucks (SBUX: 30.40 -0.47 -1.52%) impressive quarter results announced last week, but with the coffee major has publicly announced its willingness to part ways with Kraft Foods Inc (KFT: 30.23 -0.32 -1.05%) and the upscale Italian coffee company, IllyCaffe SpA, making inroads onto Starbucks Corp.’s turf by serving coffee to well-heeled travelers in upscale hotels is now being seen as two potential moves that could shake up the single-cup coffee market in U.S. grocery stores.

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Starbucks Sets Up Coffee Facilities in China’s Yunnan

Starbucks Corp., the world’s biggest coffee chain, will set up a farm and processing facilities in China’s southern Yunnan province, from which its coffee purchases have grown 20 fold in three years.

The farm and coffee-processing facilities will be built in Pu’er county, where the namesake tea is grown, Starbucks said in a statement today. It will also establish a farmers’ support center, its first in Asia and third globally, following Costa Rica and Rwanda.

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Starbucks to Double Rate of Store Openings as Economy Recovers

Starbucks Corp., the world’s biggest coffee chain, plans to more than double the rate at which it opens stores to an average of more than one a day during the next 12 months, as the global economy recovers.

“Our ability to navigate through the financial crisis and come out much stronger gives us reason to start growing the company again,” Chief Executive Officer Howard Schultz said in an interview in China’s Yunnan province today. He plans to open 500 stores in the fiscal year that began in October, with 400 outside the U.S., he said.

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Starbucks defeats NY woman's tea burn lawsuit

(Reuters) - A Manhattan woman has failed to persuade a U.S. appeals court that Starbucks Corp should be held liable for severe burns she suffered after spilling tea served in a double cup.
The 2nd U.S. Circuit Court of Appeals upheld on Tuesday a lower court's dismissal of a $3 million lawsuit brought by Rachel Moltner against the world's largest coffee chain.

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Starbucks Brings Mobile Payments to NYC

Starbucks recently announced the expansion of its Starbucks Card Mobile payment trial to almost 300 stores in New York City as well as Nassau and Suffolk counties on Long Island. The trial had previously been limited to 16 stores in Seattle and Northern California, as well as more than 1,000 Starbucks in Target stores.

 

Customers who download the free Starbucks Card Mobile App on their BlackBerry, iPhone, or iPod touch can pay for purchases via their mobile device, manage their card account, reload their card balance using a major credit card, check their My Starbucks Rewards status, or find nearby Starbucks stores.

 

"Mobile technology is part of our customers' daily routine, and with the expansion of mobile payment in our test cities, we're seeing more and more customers using their smartphones as their mobile wallets," says company vice president Brady Brewer.

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New Zelands Restaurant Brands Shares Gain after First-Half Profit Jumps

Restaurant Brands New Zealand Ltd., an owner of KFC, Pizza Hut and Starbucks franchises, rose the most in a month in Wellington trading after it said first-half profit gained 52 percent.
Net income rose to NZ$13.5 million ($10 million) in the six months ended Sept. 13 from NZ$8.9 million a year earlier, the Auckland-based company said in a statement. The stock rose 2.4 percent, the biggest gain since Sept. 21.
Restaurant Brands’ share price has jumped almost 54 percent since Jan. 1, becoming the best performer on the benchmark NZX 50 stock index. The company increased its first-half dividend to 7 cents a share from 4.5 cents and reaffirmed that full-year profit excluding non-trading items will rise to a range of NZ$24 million to NZ$26 million.

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Will Beer Succeed as the New Buzz at Starbucks?

Lately Starbucks (SBUX) has been trying to change things up. They finally got free Wi-Fi with free digital content, they are trying to slow down the process of making drinks (which seems to me about the equivalent of clipping a bird’s wings), and now they’re talking about adding booze to the menu. Irish coffee, anyone?

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Starbucks Acquires Full Ownership of Starbucks Brazil

SAO PAULO--(BUSINESS WIRE)--Starbucks Corporation (NASDAQ:SBUX) announced today that it has assumed 100 percent ownership and operating control of Starbucks Brazil through the acquisition of Cafés Sereia do Brasil Participações S.A. Converting the market to a company-operated business allows Starbucks to focus on the enormous opportunity in Brazil through pursuing thoughtful growth while continuing to deliver unparalleled customer experience in the largest consumer market in South America.

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Starbucks to offer Premium Content on its WiFi

Starbucks is not just offering its customers free wi-fi on the hazy notion that if they spend more time surfing the Web they will drink more coffee. No, the ubiquitous coffee shop retailer has plans to debut the second piece to its digital strategy this fall, which offers a more clear monetization path for it and its partners.

Called the Digital Network, Starbucks intends to offer exclusive and premium content from such providers as Apple, the New York Times, the Wall Street Journal and health publisher Rodale.

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Marriott, Le Meridien, W Hotels Will Add Rooms in Taiwan

Marriott International Inc., the largest U.S. lodging chain, and other groups including Le Meridien and W Hotels, plan to open their first hotels in Taiwan as they compete to cater for rising numbers of Chinese tourists.

Marriott is working with Taiwanese businessman B. V. Riu, owner of Taipei-based luxury hotel Sherwood, on a NT$6.2 billion ($195 million), 352-room lodging franchise agreement, Victor Chou, president of Sherwood, said. Le Meridien and W Hotels, both owned by Starwood Hotels & Resorts Worldwide Inc., also plan to open premises in the city this year.

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Starbucks Reports Record Third Quarter Earnings

SEATTLE--(BUSINESS WIRE)--Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its fiscal third quarter ended June 27, 2010, updated FY10 targets, and introduced FY11 targets.

Fiscal Third Quarter 2010 Highlights:

•Comparable store sales increased 9%, driven by a 6% increase in traffic and a 3% increase in average ticket
◦U.S. comparable store sales increased 9%, driven by a 6% increase in traffic and a 3% increase in average ticket
◦International comparable store sales increased 6%, driven by a 4% increase in traffic and a 2% increase in average ticket

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Starbucks to Offer Free Wi-Fi

Many coffee shops try to discourage people from buying a cup of coffee and then lingering for hours to use the free wireless Internet access. Starbucks, meanwhile, is encouraging them to stay as long as they want.

Starbucks said Monday that as of July 1 its stores in the United States would offer free Wi-Fi, via AT&T, that anyone can access with a single click. In case customers run out of distractions on the Web, Starbucks is giving them even more reason to sit and surf, offering a variety of digital content through a partnership with Yahoo.

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Starbucks has a new growth strategy — more revenue with lower costs

Starbucks is once again looking to grow, but this time will be different.


The coffee juggernaut is not aiming for seven new stores a day, a clip it reached three years ago after setting a goal of 30,000 stores worldwide. That dream died a year later and just over halfway there with sales and profits sliding before other retailers really felt the recession. The Seattle company has since closed nearly 900 stores and eliminated more than 34,000 jobs.

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Harrah’s Said to Seek Offers for Rio Las Vegas Casino

April 23 (Bloomberg) -- Harrah’s Entertainment Inc., the casino company owned by Apollo Management LP and TPG Inc., is seeking bids for the Rio All-Suite Hotel & Casino in Las Vegas, people with knowledge of the situation said.


Starwood Capital Group LLC and Colony Capital LLC are among the companies that are weighing bids for the resort, said the people, who declined to be identified because the talks are private. Some bids value the Rio at about $500 million, two of the people said.

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