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The Sticky Secret to Starbucks' Success

When you think of the most powerful brands in the world today, Starbucks (NASDAQ: SBUX  ) has to at least be in the conversation. It's actually hard to believe it was only founded in 1971; it seems like it's been around for much longer. But, then again, maybe that's just because the company has done such a good job of becoming integrated into our everyday lives.

Starbucks' earnings release on April 24 was another solid one. Global same-store sales were up 6% versus the 5.4% expected growth, and top-line growth of 9% led to an impressive 17% boost in earnings per share thanks to a strong performance from the company's channel-development segment. Maybe breaking up early with Kraft was the right thing to do after all?

But if there's one number you should note from this most recent quarter, it's this one: 10 million. As in more than 10 million Starbucks customers are actively using the company's mobile app, twice the number from just a year ago. Heck, odds are you're probably one of those 10 million; I know I am.

Why does this matter? A few reasons, actually. As the proliferation of mobile technology continues to spread, more people are doing more things with their smartphones. Because CEO Howard Schultz has placed such a high priority on mobile, digital, and social platforms, Starbucks is seen as a leader in this front, and other companies are trying to copy it. Flattering, indeed.

And, consider this: Last year, Starbucks saw almost $4 billion loaded onto Starbucks cards. The more users who integrate their cards into the mobile app means a lot of repeat business from loyal customers.

Starbucks is a great example of what excellent leadership can do. Howard Schultz has breathed new life into this company since he returned in 2008, and while shareholders up to that point had done quite nicely, he has let investors know, in no uncertain terms, that he still sees Starbucks' best days ahead. From what I've seen in covering the company, I'm inclined to agree with him.

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Jason Moser

Jason A. Moser is an analyst for Motley Fool One. He finds stocks that make money and tells the world about them. He's also won a Buzzy. And an Awessie.

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9/4/2015 3:59 PM
SBUX $54.28 Down -0.41 -0.75%
Starbucks CAPS Rating: ****