While most quick-serve restaurants focus on breakfast as their main source of income, Starbucks Corp. is making a move to shift more revenue from morning to later in the day; they are trying to pull in more guests for food and drink at later hours. They have scheduled a report for their first fiscal quarter this month, and hope the report results show a strong start in reaching their five-year growth targets. In the like period a year before, Starbucks had earned an adjusted 80 cents a share up from 71 cents, which should come as a relief to shareholders.
It’s getting harder to go anywhere without seeing a Starbucks, supporting some fears about maintaining reasonable growth. Executives still plan to expand the current store count of 21,366 to over 30,000 in five years while doubling operating income. That’s roughly a 40% increase in the number of stores in 5 years compared to the 28% growth in stores in the previous past five years. Adding new categories such as tea stores and new stores in foreign markets where licensing occurs rather than direct ownership will predominate the expansion. Even the seemingly saturated U.S. chain has potential with growing food sales, evening visits and a successful digital sales strategy that allows stores to handle more customers.
The operation-income is projected to grow to an average of 15% over five years, which is a slowdown from its recent pace. Starbucks is expanding ambitiously by adding new categories and attracting new customers for evening visits.