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Starbucks to Open 15 Drive-Thru Cafes - Analyst Blog

Posted: 3/19/2013 10:46:00 AM
Referenced Stocks: BKW;DNKN;RRGB;SBUX

Coffee giant, Starbucks Corporation 's ( SBUX ) popular coffee brand Seattle's Best Coffee announced plans to open 15 new drive-thru cafes in the Dallas-Fort Worth region this spring.

Drive Thru cafes are Seattle Best Coffee's new retail concept which are increasingly gaining popularity. This concept caters to a growing number of coffee lovers who don't have the time to go to a café. Moreover, these cafes generate incremental revenues and profits compared to traditional stores.

The menu at these cafes will include coffee, dessert-inspired specialty coffee drinks, hearty egg sandwiches and pretzel melts, and sweet and savory handheld Anytime Pies. The cafes will also provide more than 150 new full- and part-time jobs to the region.

Starbucks also announced the appointment of Sharon Rothstein as its global chief marketing officer. Rothstein previously served as senior vice president of marketing at specialty beauty retailer Sephora.

Starbucks carries a Zacks Rank #3 (Hold). We like Starbucks' strong market standing, new product launches, rapid growth in China, the flourishing Channel Development business as well as the solid turnaround in its U.S. business. We believe that the company has compelling growth drivers like La Boulange bakery products, Verismo at-home-coffee machine, Teavana tea and K-Cups packs to sustain earnings momentum in the next few quarters. However, poor sales in Europe due to the depressed macroeconomic conditions keep us on the sidelines.

Other Stocks to Consider

Some other stocks in the retail/restaurant industry that are currently doing well and are worth considering include Red Robin Gourmet Burgers Inc. ( RRGB ) - Zacks Rank #1 (Strong Buy), Burger King Worldwide, Inc. ( BKW ) - Zacks Rank #2 (Buy) and Dunkin' Brands Group, Inc. ( DNKN ) - Zacks Rank #2 (Buy).

BURGER KING WWD (BKW): Free Stock Analysis Report

DUNKIN BRANDS (DNKN): Free Stock Analysis Report

RED ROBIN GOURM (RRGB): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

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