Starbucks' (NASDAQ:SBUX) stock price has been skyrocketing, driven by exceptional business performance. Since starting 2013 at $55 per share, the stock has risen to $75 per share -- a 36% increase in a little more than a year. The increase comes on the backs of 26% earnings-per-share growth and 7% comparable-stores sales growth in 2013. There are three signs that Starbucks' business -- and its stock price -- will reach new highs in 2014 as it executes its growth strategy.

U.S. comps continue to amaze
It seems like there is a Starbucks on every corner in the United States. A blogger calculated that more than 80% of Americans live within 20 miles of a Starbucks. Usually, market saturation results in slowing growth as the opportunity to open more stores dwindles. However, Starbucks has exceeded expectations by stringing together four straight years of comparable-store sales growth companywide, including four straight years of comparable sales growth in U.S. stores.

Sbux Comps

Source: Starbucks press releases

More importantly, most of the comparable store growth has come from traffic increases, with average ticket increases making up only about a third of the growth. This means that more people are going to Starbucks more frequently -- great news for shareholders.

In addition, Starbucks is doing a number of things to boost the average ticket price. For instance, it is rolling out gourmet sandwiches and pastries to all of its U.S. stores this year. If people grab a croissant along with their morning coffee, the average ticket will increase. In addition, the food menu could help draw customers back into the stores for the lunch hour, increasing traffic. As a result of this and other initiatives -- like selling alcoholic beverages and allowing mobile payments -- Starbucks U.S. comparable-store sales are set to continue robust growth throughout 2014.


Moreover, mobile payments also allow Starbucks to track customer behavior, giving it access to vital data that was once only available to credit card companies. It can use the data to tailor its customers' experience, such as delivering relevant coupons and seizing on trends in spending patterns. As Starbucks continues to innovate along the mobile front, its bottom line will continue to grow.

Huge growth potential in Asia
Starbucks may be focusing on comparable sales growth in the U.S., but it is rapidly expanding its store count in Asia. During the company's first-quarter 2014 conference call, CEO Howard Schultz reminded investors that, with 1,000 stores just 15 years after it entered the country, China is on track to become Starbucks' largest market outside of the U.S.

The China and Asia Pacific segment is comprised of more than 4,000 stores; the company added 209 stores in the region in the first quarter of fiscal 2014 -- a 5% increase in just one quarter!

It is not hard to see why Starbucks is adding so many new Asian locations. Comparable-store sales growth topped 9% in 2013. Moreover, established Asian locations' annual pre-tax earnings top 75% of the investment required to build a new store; this means that each new store can be counted on to generate an outstanding return on investment within a short time. As a result, Starbucks' growth in Asia will continue to be expansive and profitable for many more years.

Much has been made about Starbucks' astronomical stock price; it trades at 27 times consensus 2014 earnings per share. However, with earnings growing at a double-digit pace and all signs pointing toward that trend continuing, Starbucks' stock price appears to just be keeping up with Starbucks' business results. This is not a stock for investors looking to score a bargain, but Starbucks' strong business performance makes it a good candidate for growth investors looking for a fairly priced stock that has significant upside.

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Ted Cooper has no position in any stocks mentioned. The Motley Fool recommends McDonald's and Starbucks. The Motley Fool owns shares of McDonald's and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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