) recently announced that it will open a store in Vietnam next
month in partnership with Hong Kong Maxim's Group.
Starbucks has granted a license to Maxim's subsidiary, Coffee
Concepts (Vietnam) Limited, to run a store in Vietnam's Ho Chi
Minh City, making Vietnam the 12
market to boast a Starbucks store in the China Asia-Pacific (CAP)
The Starbucks brand is gaining popularity with consumers
across Asia as the company continuously expands its store base
outside U.S. Management believes the China Asia-Pacific
(CAP) region will drive significantly larger business growth over
the next five years.
Following the strong performance in fiscal third quarter 2012,
this region has produced strong double digit comps for 10
consecutive quarters now. Specifically, Starbucks' business in
China is rapidly growing and the region is expected to become the
company's second-largest market by 2014. The company is looking
to take the store count in this region to 1,500 in 70 cities by
Other than that, the company runs a decently profitable
business in Japan and hopes to have more than 700 stores in Korea
over the next four years. In October last year, Starbucks entered
the lucrative Indian market with its first three store openings
in Mumbai. The company-operated stores were opened in joint
venture with Tata Global Beverages Limited. The CAP segment is
expected to have 4,000 stores by the end of 2013, of which 1,000
will be in Mainland China, 1,000 in Japan and 500 in Korea.
We currently have a long-term Neutral recommendation on
Starbucks. However, the stock carries a Zacks #2 Rank (short-term
Starbucks is gaining momentum following the solid results in
fiscal 2012; regular product innovations like the at-home coffee
machine, Verismo; and great strategic deals like La Boulange,
Evolution Fresh and Teavana.
Starbucks competes with
) which carries a Zacks#3 Rank (short term 'Hold' rating).
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