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Starbucks Cuts Workforce by 350 at Seattle Headquarters
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Per media report, Starbucks Corporation (SBUX - Free Report) is reducing its workforce by 350 at its Seattle Support Center. Notably, this layoff is part of its restructuring plan, which was revealed in September.
Additionally, the company is emphasizing on increasing the pace of innovations, which bodes well for its business, partners and customers. With growth prospects and fat returns, Starbucks has been streamlining its business and directing investments toward operations.
We believe these strategic efforts are aimed at accelerating the company’s sales growth and reviving margin in the United States. In fourth-quarter fiscal 2018, the company saw comps growth of 4% in its largest market, the United States. This marked Starbucks’ strongest gain in the last five quarters.
However, margin contraction remains a major concern for the company. In the first, second, third and fourth quarter of fiscal 2018, Starbucks’ non-GAAP operating margin shriveled 170, 80, 230 and 190 basis points (bps), respectively. The decline in the recently reported quarter can be primarily attributed to an impact of investments associated with the U.S. tax law change and product mix shift mainly toward food and planned partner. Rise in costs due to investment in digitalization and unfavorable impact of 40 bps from the Nestlé transaction also dented the company’s operating margin.
Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 27.8% compared with the industry’s 10.9% growth. The company’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program, digital offerings and product innovations will continue to boost growth in the long run.
Meanwhile, Starbucks is strengthening its product portfolio with significant innovations related to beverages, refreshment, health and wellness, tea and core food offerings. Evidently, beverage innovations have been significantly contributing toward Starbucks’ comps growth over the years. These apart, the company’s efforts to offer more nutritional and healthy products to its customers are commendable.
BJ's Restaurants has reported better-than-expected earnings in the trailing four quarters, with an average of 33.2%.
Dave & Buster's Entertainment has an impressive long-term earnings growth rate of 14.8%.
Darden Restaurants’ earnings for the current year is expected to grow by 16.8%.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
Image: Bigstock
Starbucks Cuts Workforce by 350 at Seattle Headquarters
Per media report, Starbucks Corporation (SBUX - Free Report) is reducing its workforce by 350 at its Seattle Support Center. Notably, this layoff is part of its restructuring plan, which was revealed in September.
Additionally, the company is emphasizing on increasing the pace of innovations, which bodes well for its business, partners and customers. With growth prospects and fat returns, Starbucks has been streamlining its business and directing investments toward operations.
We believe these strategic efforts are aimed at accelerating the company’s sales growth and reviving margin in the United States. In fourth-quarter fiscal 2018, the company saw comps growth of 4% in its largest market, the United States. This marked Starbucks’ strongest gain in the last five quarters.
However, margin contraction remains a major concern for the company. In the first, second, third and fourth quarter of fiscal 2018, Starbucks’ non-GAAP operating margin shriveled 170, 80, 230 and 190 basis points (bps), respectively. The decline in the recently reported quarter can be primarily attributed to an impact of investments associated with the U.S. tax law change and product mix shift mainly toward food and planned partner. Rise in costs due to investment in digitalization and unfavorable impact of 40 bps from the Nestlé transaction also dented the company’s operating margin.
Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 27.8% compared with the industry’s 10.9% growth. The company’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program, digital offerings and product innovations will continue to boost growth in the long run.
Meanwhile, Starbucks is strengthening its product portfolio with significant innovations related to beverages, refreshment, health and wellness, tea and core food offerings. Evidently, beverage innovations have been significantly contributing toward Starbucks’ comps growth over the years.
These apart, the company’s efforts to offer more nutritional and healthy products to its customers are commendable.
Key Picks
Better-ranked stocks worth considering in the same space include BJ's Restaurants, Inc. (BJRI - Free Report) , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BJ's Restaurants has reported better-than-expected earnings in the trailing four quarters, with an average of 33.2%.
Dave & Buster's Entertainment has an impressive long-term earnings growth rate of 14.8%.
Darden Restaurants’ earnings for the current year is expected to grow by 16.8%.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>