Starbucks Corporation (NASDAQ:SBUX) Raised 2013 Expectation, Defies Industry Trend

Starbucks Corporation(NASDAQ:SBUX) increased its profit forecast for present fiscal year after sales in its top market of the US topped expectations. This has given the company an optimism that has escaped much of the US restaurant industry in recent months.

Stocks of the biggest coffee chain in the world have jumped 7% to $49.90 in extended trading on Thursday.

The exceptional quarterly results from the company that is known for its frappuccinos and lattes followed a sequence of earnings disappointments and downsized forecasts from some of the top performers of the sector, who are struggling with the still feeble economy and increasing competition from resurgent competitors.

It was two weeks back when McDonald’s had posted its worst quarterly restaurant sales growth in a span of 9 years and investor dearest Chipotle Mexican Grill said the speed of its restaurant sales growth could cool in the year 2013.

Howard Schultz, the Chief Executive of Starbucks said that the solid Q4 performance of Starbucks has ideally positioned the company to into the holiday season with a tough momentum.

The company based in Seattle has set its new earnings per share forecast for fiscal at $2.06 to $2.15, up from $2.04 to $2.14 for each share, previously. It also raised its aim for international net new stores from 1,200 to 1,300 on accelerated development plans for China.

Global sales at stores that have opened at least 13 months back were up 6%, aided by a 5% increase in traffic and a 1% rise in average spending for each visit. That has topped the 4.97% rise that analysts polled by Consensus Matrix had anticipated for.

In the upcoming months, Starbucks is counting on new products like Evolution Fresh juices and lightly caffeinated, low-calorie flavored Refreshers drinks to keep helping sales soar.

Starbucks has reportedly reopened most of the 1,000 stores that it had shuttered due to Hurricane Sandy.

Shares of SBUX were up over 9% to $50.84 in Friday’s session.

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Big Earnings Gainers: Linkedin Corporation, Starbucks Corporation – LNKD, SBUX

Linkedin Corporation (NYSE:LNKD) seems to be the only social networking company which has been outperforming. The stock soared 8.41% in the pre-open session as the company reported solid Q3 earnings late Thursday, which easily topped analysts’ estimates, thanks to increased ad rates and revenue from hiring services, which saw a solid boost.

Moreover, the company boosted the full year guidelines and now Linkedin projects to generate revenue of $939 million and $944 million, well above from its past outlook of $915 million to $925 million.

For the latest quarter, the company earned $2.3 million, or 2 cents a share on revenue of $252 million, signifying a 81% year over year jump in revenue. On an adjusted basis, the company would have earned 22 cents a share.

Analysts were estimating the company to earn 11 cents on revenue of $244.2 million.

There is further good news, the company’s Chief Executive Jeff Weiner claimed on a conference call on Thursday that the online service hold 187 million members and members are more busy on the website compared to the past.

Starbucks Corporation(NASDAQ:SBUX) is another stock, which has been showing buying activities in  the pre-open session as the world's biggest coffee chain decided to raise its full year earnings forecast on the back of strong quarterly earnings in the latest quarter.

The company now projects to earn $2.06 to $2.15 a share, compared to its earlier guidance of $2.04 to $2.14 a share. Moreover, the company also lifted its target to open global net new stores by 1,000 to 1,300.

For the latest quarter, the company earned $359 million, or 46 cents a share on revenue of $3.36 billion, signaling a 0.10% y-o-y increases in net income and 11% y-o-y rise in revenue.

The company showed a solid performance in terms of same store growth, which was up 6% for the past 13 months, contributed by 5% jump in footfall and another 1% came in from rise in average spending per visit.

Shares of SBUX are up 8.62% in the pre-market session.

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Starbucks Corporation (NASDAQ:SBUX) All Set To report Q4 Earnings On Thursday

Coffee chain store operator Starbucks Corporation (NASDAQ:SBUX) will be reporting its fourth quarter results on Thursday.

The street expects it to report earnings of $0.45 a share on revenues of $3.39 billion, while for the December quarter guidance has been set at $3.81 billion in revenues.

Starbucks reported Q3 EPS of $0.43 that fell below the consensus of $0.45 per share. Management also lowered its full fiscal 2013 EPS of $2.04-$2.14 due to a deterioration of the macro environment and a broad-based slowdown.

After two years of depressed coffee prices, they are on the uptick once again and Starbucks will gain from that as it locked in its coffee cost in fiscal year 2013 and started to purchase into fiscal year 2014.

Its margins will see improvement from that.

Surveys have shown that Starbucks is gaining market share at the expense of Green Mountain after it introduced its K-Cups about a year ago.

At present the company has nearly 17 percent of the market share, up from 11.2 percent in January, while that of Green Mountain to 57 percent from 59 percent in the same period.

"In my view, Starbucks will continue to gain K-Cups market share at the expense of incumbents and mass-market brands in the long term given its superior coffee quality, strong brand equity, and competitive pricing," Jiang Zhang wrote in Seeking Alpha.

However due to the downturn and lower speeding patterns, consumers are increasingly turning to cheaper alternatives such as Safeway and Kroger, which have introduced their own K-Cups.

Experimentation with different labels by consumers may affect Starbucks in the near term.

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Stocks In News: Yahoo! Inc. (NASDAQ:YHOO) & Starbucks Corporation (NASDAQ:SBUX)

Internet portal Yahoo! Inc.(NASDAQ:YHOO) is set to close down its portal in South Korea and an Internet advertising business, the company said on Friday.

Its Seoul office, which has over 200 employees, would be shut by the end of the year, it said. This is part of the company's strategy to close down loss-making operations under its new Chief Executive Marissa Mayer, who took charge this July.

South Korea is a market where the company has struggled with losses for over a decade.

Since entering South Korea in 1997, Yahoo has operated a namesake portal in Korean and an Internet advertising company, Overture Korea.

Yahoo Korea was struggling against local competition and also Google and Facebook. It failed to increase advertising revenues with more advertisers flocking to mobile devices.

Meanwhile coffee chain company Starbucks Corporation(NASDAQ:SBUX) opened its first store in India in an equal joint venture with Tata Global Beverages, part of the Tata group.

The first store was opened in the western Indian city of Mumbai, located on the Arabian Sea.

The first outlet opened in the upscale locality of south Mumbai. Two more outlets are schedule to be opened in Mumbai next week followed by stores in capital New Delhi next year.

Chief executive Howard Schultz said India, along with China, are "at the core" of the company's growth strategy.

At a price of slightly over $2 for a 12 ounce cup of cappuccino, it will be catering to the upper end of the coffee-drinking segment. For snacks to go with the coffee the menu has items such as Elaichi Mawa croissants — made with cardamom and milk solids — and tandoori paneer rolls for local tastes.

Share of SBUX are down 4% to $45.56.

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Starbucks Corporation (NASDAQ:SBUX) Verismo brewers start selling from Tuesday - Green Mountain Coffee Roasters (NASDAQ:GMCR)

On Tuesday, Starbucks Corporation (NASDAQ:SBUX) stores in the United States will start selling the single-serve Verismo coffee and espresso brewers that will enable die-hard coffee-drinkers make their own brew at home.

With this the company will come in direct competition with makers of such brewers, Green Mountain Coffee Roasters and Nestle that have dominated the market so far.

Green Mountain Coffee Roasters Inc.(NASDAQ:GMCR) is the colossus in this segment having more than 75 percent market share in the U.S. with its single-serve Keurig coffee machines.

Nestle has a global market share of 35 percent with its Nespresso that services up single-serve espresso coffee. It is largely popular in Europe.

When Starbucks had first announced the launch of its Verismo machines in March, shares in Green Mountain had taken a tumble.

The new single serve machines from the ubiquitous coffee chain sell in two versions for $199 or $399, depending on the size and will be stocked at about 4,300 stores of the company starting on Wednesday, the company said.

However it is already available online and through other U.S. retailers.

The pricing of the machines are similar to what the competition has on offer.

Green Mountain's new Keurig Vue coffee brewer sells for around $250, while Nespresso machines can cost anywhere from $130 to $700.

Starbucks and Green Mountain have a partnership to provide coffee-filled K-cups for use in Green Mountain's Keurig machines. Starbucks has 15 percent share of the K-cup market.

Shares in Starbucks rose more than 2.70 percent to $48.96 at close of trading on Monday.

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