Starbucks Ropes in Celebrity Partner - Analyst Blog
March 20 2014 - 3:00PM
Zacks
At its recently held annual meeting of shareholders,
Starbucks Corporation (SBUX) announced an unusual
collaboration with global media leader and philanthropist Oprah
Winfrey, to create Teavana Oprah Chai Tea. At the meeting, Howard
Schultz, chairman, president and chief operating officer (CEO) of
Starbucks also discussed the company’s plans to increase focus on
tea and its aim to double market cap.
Starbucks/ Oprah Team Up
Teavana Oprah Chai Tea will be available at all Starbucks and
Teavana stores from April 29. The product has been created in
collaboration with Oprah Winfrey who has personally crafted the
beverage with Teavana’s leading teaologist. Starbucks will donate a
portion of the proceeds from the sales of the chai drink to the
Oprah Winfrey Leadership Academy Foundation which provides funding
for education of the youth.
Focus on Tea
Starbucks believes tea is the world’s second most widely
consumed beverage and offers a large scope for innovation. A year
after it acquired tea retailer Teavana in Dec 2012, Starbucks plans
to further exploit the$90 billion global tea market.
The company has already opened nearly 40 new mall-based Teavana
stores and has plans to open more than 20 additional stores through
the rest of fiscal 2014. Also, Starbucks has opened two Teavana tea
bars, one each in New York City and Seattle, which offer an
assortment of handcrafted tea beverages, premium loose leaf teas,
tea-inspired food offerings, and tea merchandise. These products
will soon be available in Starbucks stores as well. Moreover,
Starbucks plans to open tea bars in Chicago, Los Angeles, and
additional locations in New York City later this year.
As competition grows in the coffee market, Starbucks is trying
to sell non-coffee products like juices, energy drinks, food, and
tea to expand sales in its U.S. stores.
Double Market Cap
The company is aiming to double its market capitalization from
$57 billion at present to more than $100 billion as it consistently
delivers strong revenues and profits.
Updated iPhone App Launched
Starbucks launched its previously announced, updated mobile app
for Apple, Inc.’s (AAPL) iPhone as it aggressively
expands its digital business. The new app includes a digital
tipping feature that will allow customers to leave tips to
Starbucks baristas from the app.
Other Stocks to Consider
Starbucks carries a Zacks Rank #3 (Hold). Better-ranked stocks
in the retail-restaurants sector include The Wendy's
Company (WEN) and Buffalo Wild Wings
Inc. (BWLD). Both these stocks hold a Zacks Rank #2
(Buy).
APPLE INC (AAPL): Free Stock Analysis Report
BUFFALO WLD WNG (BWLD): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
WENDYS CO/THE (WEN): Free Stock Analysis Report
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