Starbucks (NASDAQ:SBUX) and its second-quarter results prove why the company remains the best bet among large quick-serve restaurants. Starbucks reported global comparable-store sales grew 6%, while competitors McDonald's (NYSE:MCD) and Dunkin' Brands (NASDAQ:DNKN) saw global comparable sales rise 0.5% and 1.2%, respectively.

Source: Starbucks

Both McDonald's and Dunkin' Brands blamed the weather for their weak results. This begs this Fool to ask, "Well how can you explain the strong results from Starbucks?" The answer lies in the fact that Starbucks is eating its competitors breakfast, lunch, and soon happy hour.

A strong quarter from all angles
The latest quarter was the 17th consecutive quarter of 5% or greater comparable sales growth. What I really liked was that Starbucks saw strong growth across all regions. The Americas segment posted growth of 6%; Europe, the Middle East, and Africa rose 6%; and China/Asia Pacific saw comparable sales rise 7%. What this means is that across the globe, the company is posting consistent sales growth no matter where a Starbucks store is located.

Besides sales growth, Starbucks continues to boost profits. This comes as Starbucks' operating margin increased 130 basis points in the second quarter to 16.6%. What this means is that for every dollar in sales, Starbucks earned nearly $0.17 in operating income. This is how profitability is measured and resulted in Starbucks recording earnings per share of $0.56, an increase of 17% over last year's second quarter.

Plenty of more stores can be opened
Despite having more than $15 billion in revenue and more than 20,000 stores in 64 countries, CEO Howard Schultz sees plenty of store growth ahead. On the company's earnings call, he said:

Our research clearly demonstrates that Starbucks still accounts for [a] very small share of total global coffee occasions and that we are significantly under-stored in many markets, including North America, China, Brazil, and India, today our fastest growing international markets.

Opening more stores makes great economic sense. Each new store generates a return on investment of more than 50%. This gives a sales-to-investment ratio of more than 2 to 1. The average unit generates $1.2 million-plus in sales in its first year of operation. To finance this growth, Starbucks is well capitalized. The company has $1.7 billion in cash to $2.05 billion in debt, for a net debt position of only $305 million.

This year Starbucks expects to spend $1.2 billion to add 1,500 net new stores. Of these, 750 will be opened in Asia, 600 in the Americas, and 150 in Europe, the Middle East, and Africa.

Look for beverage growth outside of coffee
Starbucks wants to be more than just a coffee company. In 2012, Starbucks purchased Teavana for $620 million to expand its line of tea offerings. Most recently, Starbucks announced that it is partnering up with Oprah Winfrey and looking for the 'Oprah Effect' with Teavana Oprah Chai Tea.

Source: Starbucks

Besides tea, Starbucks is expanding its Fizzio line of cold-carbonated beverages. After testing Fizzio in select markets last year, the company is rolling it out to more than 3,000 stores across the U.S. sunbelt, Singapore, Korea, and several cities in China this summer. Fizzio will come in three flavors -- Ginger Ale, Spiced Root Beer, and Lemon Ale.

Source: Starbucks

In addition to Fizzio, Schultz told CNBC that "the test is over," and Starbucks will move forward with its Happy Hour. Starbucks will offer alcoholic beverages, including beer and wine, in more stores after a successful test program in the key markets of Chicago, Seattle, Los Angeles, Atlanta, Portland, and Washington, D.C. This move will help boost sales in the evening hours when coffee sales slow down.

How do shares compare?


Market Cap

Forward P/E


1 Year Return

Dividend Yield













Dunkin' Brands 






Source: Yahoo! Finance

Foolish final thoughts
The fact remains that there is only one Starbucks. As hard as McDonald's and Dunkin' Brands try and compete with Starbucks, they are not posting the same sales growth as their competitor. Schultz has done a remarkable job as a marketer and an innovator. Most notable to this Fool is that Starbucks posted a stellar quarter in spite of a terrible winter. It turns out that its customers need their Starbucks fix no matter what. Snow, sleet, or freezing rain won't keep the average Starbucks customer away. Unfortunately that isn't the case for McDonald's and Dunkin' Brands and is why Starbucks continues to blow away the competition.