What Starbucks actually does
Starbucks is the world’s largest coffeehouse chain, with tens of thousands of stores. It sells drinks, food and packaged coffee, and runs a popular rewards app. Some stores are run by the company itself, and others by licensed partners.
How the business makes money
Most revenue comes from selling beverages in its own stores, plus licensing and product sales such as grocery coffee through partners. Sales depend on the number of customers and how much they spend, and on keeping stores efficient.
The dividend story
Starbucks introduced a dividend in 2010 and has raised it each year since, paying quarterly. The yield is modest. In recent years sales growth slowed and the company changed leadership to turn around its performance, so dividend growth may follow profits.
What to keep an eye on
- Traffic. Fewer visits hurt sales.
- China. Competition from local chains.
- Costs. Coffee, labor and rent.
- Turnaround. Execution under new leadership.
Quick take
Starbucks is a strong global brand with a growing dividend and a business in turnaround mode.