Starbucks 2014 Annual Report

2021-04-28 05:53:48
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Starbucks purchases and roasts excellent quality coffees that together with well-handcrafted coffee, tea, and other beverages are sold. Furthermore, Starbucks also sells fresh food items in stores operated by the company. Starbucks sells a variety of tea and coffee products, grocery and other national foods accounts through its trademark. Goods and services are also sold under the Starbucks popular brand in conjunction with other brands such as Seattle, Best Coffee, Ethos and Evolution Fresh. As a premier roaster, retailer and marketer in the world, Starbucks operates in 65 countries. Different corporations have different symbols that make them unique in the stock market. The company's common stock trades on the NASDAQ market with its stock symbol being "SBUX".

As of 26th January 2016, the current price per share of Starbucks common stock is $ 58.7316 USD. The price is not as stable as it reaches a low of $58.74 USD (Marketwatch.com, 2016). In 2014, the cash dividends paid to stockholders in each quarter was 0.26 USD with the dividend in the last quarter increasing to 0.32 USD. In 2013, the dividend paid to stockholders was 0.21 USD. Comparing 2013 to 2014 regarding dividend paid, the dividend paid in 2013 was lower compared to the dividend paid in 2014. The difference between the year 2013 and 2014 is 0.05 USD. As of September, the total net revenue-filled by Starbucks was 16.45B USD.

Starbuck had a good reputation regarding performance since 2008 and had always rewarded its investors. The indications were stronger that the trend would continue in more years to come. Since 2008 to 2013, Starbucks performed well and always was ahead of S & P 500, Nasdaq Composite and S&P Consumer Discretionary Index. If an investor invested $100 in 2008, then they got $545 in 2013, unlike the rest where the same amount earned not more than $236 in the same period of investment (Alpha Strategist, 2014).

In 2013 the total net revenue stood at 14.89B compared to the increase to 16.45B in 2014; therefore there was a 78% increase in net revenue. The increase in revenue was attributed to a rise in sales in the global comparable stores, EMEA sales increased, China and Asia Pacific sales also increased. Starbucks increased the number of stores opening an additional 344 new stores globally which meant the operating stores reached 20,863 operating in 64 countries. The earnings per share in 2014 surged to 22% to hit a new record of $ 0.67 (Financial release, 2014).

I would recommend the buying of Starbucks stocks to any investor. The reason being that in the last five years there has been a trend that indicates a constant growth regarding net revenue. With increased net revenue then the stock gains and, therefore, shareholders stand a chance of getting better earnings per share. The ultimate reason for buying stocks is to make the profit, and the only way a shareholder can make the profit is by buying shares in a company with the excellent financial performance like Starbucks. Furthermore, Starbucks looks to improve its interacting with the customers using new technologies including mobile payments. With the use of new technologies such as the mobile app, Starbucks will increase its revenues which mean better earnings for the shareholders. Starbucks's expansion into other global markets such as China and Asian Pacific has guaranteed increased sales and, therefore, more revenue and profits.

The annual report has a segment that acknowledges several legal issues. The part caught my attention because legal matters can have a devastating effect on the financial progress of a corporation. However, in the Starbucks annual report emphasis are put on the amount of influence the legal matters may have on the company. The report further emphasizes that the company is not involved in any legal battles that may affect the financial progress or cash flow of the enterprise.

The annual report also acknowledges the move by Starbucks together with its new partner Sazaby League, Ltd decided to move and totally acquire Starbucks Japan, which had an available 60.5% ownership to achieve total control. Lastly, the report also emphasizes on the community responsibilities of Starbucks Corporation. The corporation works on ethical grounds when sourcing their coffee and aiming to contribute positively in every community they operate in and the world at large. This piece of information is significant because it shows a humane side of Starbucks which is not only out to make profits but also contribute to the well-being of the human race.

References

Alpha Strategist (2015). Can Starbucks outperform for another 5 years? http://seekingalpha.com/article/2160333-can-starbucks-outperform-for-another-5-years [Accessed 26th Jan 2016].

Financial release (2014). Starbucks Investors Relations. http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-newsArticle&ID=1951129 [Accessed 26th Jan 2016].

Marketwatch (2016). Starbucks Crop. Retrieved from http://www.marketwatch.com/investing/stock/sbux/financials) [Accessed 26th Jan 2016].

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