Net Lease Advisor Profile: Starbucks

Founded in 1971, Starbucks is a global brand in the quick service retail sector, specializing in the sale of high-margin specialty coffee. For the fiscal year ending 2014, Starbucks generated revenue of $16.44 billion and net income of $2.07 billion, with an extremely impressive gross margin of 58.54% and pre-tax operating margin of 18.7%. As of September 2015, its stock had appreciated 48% on a year-over-year basis.

Unlike many competitors, Starbucks is benefitting from favorable branding with millennial customers, and has a strong presence in social media and technology oriented platforms, notably mobile-payment systems. Under Howard Schultz, who purchased the company from its founders in the 1980s and returned as CEO in 2008, the company has bounced back from an overly aggressive expansion strategy in the late 90′s and early 2000′s, and same-store sales are up 7% for the third quarter of 2015,* compared with 2% for competitor Dunkin’ Donuts. An additional 1,500 new locations are slated to open this year.