Starbucksdelivered outstanding quarterly resultslast week with the stock gaining nearly 5% following the release. Management shared insights with investors during the subsequent conference call -- here are the key takeaways for long-term shareholders.
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1. This business is firing on all cylinders The second quarter was a thing of beauty, the latest in a long line of strong financial results. Founder, Chairman, and CEO Howard Schultz had this to say during the earnings call:
Those numbers are almost unheard of in the food industry, particularly among such established large-cap companies like Starbucks, and it is one of the primary reasons shareholders have been well rewarded in recent years.
Starbucks store at Tsutaya Tokyo Roppongi. Source: Starbucks
2. CAP continues to excelOne of the most important areas of the world for Starbucks both now and in the future is what the company refers to as China and Asia Pacific. This segment continues to deliver blockbuster performance, with Schultz sharing the following highlights during the call:
The China and Asia Pacific region will clearly be a primary driver of growth in the next decade. As management delivers on its projections, shareholders should profit handsomely.
3. Channel development also remain a bright spotIn addition to the strong performance of Starbucks cafes, its packaged goods business, referred to as "channel development," continues to take share:
Besides being a source of incremental growth for Starbucks, channel development also diversifies the revenue streams, thereby helping to lessen the risk to the business model posed by the growth of e-commerce.
4. Mobile payments are boosting salesStarbucks has won praise for its mobile app and payments system, and for good reason. Schultz highlighted its significance during the call:
The Starbucks mobile apps help to differentiate the company from its competitors, and this innovative culture should continue to serve shareholders well.
5. Investments in the workforce are paying big dividendsOne thing Starbucks management understands better than most of its peers is the importance of taking care of employees. Schultz explained this well:
An all-stakeholder focus is something we value here at The Motley Fool, and we believe companies that subscribe to this philosophy will significantly outperform their competitors. Starbucks is one of the best examples of this in the world today.
The article 5 Things Starbucks Corporation Management Wants You to Know originally appeared on Fool.com.
Joe Tenebruso isportfolio manager ofTier 1 Investments, a Motley FoolReal-Money Portfolio.You can connect with him on Twitter@Tier1Investor. Joehas the following options: short January 2017 $100 puts on Starbucks and long January 2017 $97.5 puts on Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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