No wonder the lines have been so darn long. (You obviously don't want to know me in the morning!) Citing, among other things, the popularity of its holiday offerings, Starbucks (NASDAQ:SBUX) delivered home-run same-store sales in November. This would normally be a big, fat yawner, given the coffeehouse's same-store sales traditions, except that Starbucks was facing an extremely tough comparison to last year's November sales. Deck the halls, indeed.
Sorry, Wal-Mart (NYSE:WMT). It seems that some of those shoppers who apparently didn't want to deal with you were sipping their seasonal Pumpkin Spice Lattes in peace. (Er, maybe it wasn't so peaceful, but in fact, a bit crowded.) On Black Friday, my own trip to an outlet mall found me in a drive-through Starbucks, which seemed to be doing a booming business.
Anyway, back to the issue at hand. Starbucks' November same-store sales increased by 13%, with revenues up 26% to $486 million. (Last November, Starbucks' same-store sales increased 11%, giving you an idea of how tough the comparison was.)
In its press announcement, the company credited its early holiday promotion, its Christmas Blend coffee, the continued popularity of its seasonal Pumpkin Spice Lattes, and growth in its fledgling music business for the "outstanding" results.
Another aspect that makes the November numbers less yawn-worthy has been a bit of nervousness about Starbucks lately. Some people, such as Fool contributor Jeff Hwang, have explored the idea of selling while the getting's good. September sales felt a little tepid compared with usual standards (even though they were still at the high end of management's long-term guidance). Last, judging by some reader feedback I received, recent word from Germany gave some pause, contemplating Starbucks' effectiveness in pushing its brand in certain European markets.
Last night's stunning same-store sales announcement likely assuaged some fears. It's pretty apparent that the $0.11 price hikes, as expected, did little to slow down Starbucks' customer traffic. And we might glean that Starbucks is a good destination for holiday shoppers looking for small gifty items like a bag of Christmas Blend or gift cards, or even a respite from shopping insanity. For now, it certainly looks like a shiny, happy holiday season is in store for Starbucks shareholders.
Get some heated, caffeinated chatter on our Starbucks discussion board.
Alyce Lomax does not own shares of any of the companies mentioned, though she's one tough Starbucks' customer.
