Starbucks, the ultimate producer of great cups of coffee, has been a solid performer over the last couple of years. They make our lives easy and convenient. But wait! You should be the first to know it – that Starbucks K Cups are now for sale! The K-cups will be available in the following flavors: Pike Place Roast, House Blend, Sumatra, French Roast and Breakfast Blend available; in packs of 24 single-servings. Amidst your busy and hectic schedule, having K-cups from Starbucks is one way to have a perfect cup every morning.
An UBS analysts noted the strong early acceptance of Starbucks K-cups, and quoted “the future of the high margin CPG division appears bright;” The product has already grabbed about 12% market share in the K-cup space. With analysts forecasting 40% growth in fiscal Q1, CPG had grown 20% year-over-year last quarter and is set for another strong run. Along with K-cups, Starbucks’ bagged coffee and blonde roast will further drive the unit, which could add more than 10 cents to fiscal 2012 EPS. Also, the analysts expect 2012 revenues to grow 13% to $13.2 billion. They have raised their fiscal 2012 and 2013 estimates to $1.89 and $2.40, which constitute 24% and 27% year-over-year growth respectively.
Starbucks remains a top performer in its sector, its stock up 47% over the last twelve months. That’s better than competitors Dunkin’ Brands (down 6% since it went public in late July) and fast food chains McDonald’s and Yum Brands (up 36% and 24% respectively). With their new K-cups, their market share will absolutely get higher than expected.
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