Starbucks Corporation (SBUX): The Company Is Still a Winner

Finally, food made an impact in the quarter, lifting comparable sales. Starbucks is rolling out its La Boulange range and now has a presence in 439 stores in the United States. As that line grows, the company is going to see more and more of its income generated by food. That will not only help growth, but it should also eventually help balance out costs so that a smaller percentage of the business is subject to the broad swings in coffee prices.

Competitors to watch out for
While Starbucks could be said to be in competition with every cafe, I’m looking out for Panera Bread Co (NASDAQ:PNRA) and Kraft Foods Group Inc (NASDAQ:KRFT). Panera Bread Co (NASDAQ:PNRA) is the cafe that has the best shot at making a dent in Starbucks’ ironsides, with its extensive food menu and rapid growth. The company posted a comparable-sales increase of 3.3% last quarter, and the beginning of its current quarter was even stronger. If Starbucks makes a concerted push into food, Panera could be its biggest hurdle.

Kraft Foods Group Inc (NASDAQ:KRFT) has taken a more aggressive tack with its Gevalia brand bagged coffee. The company has done taste tests likening it to Starbucks coffee, and has essentially launched a marketing campaign telling customers, “Think you like Starbucks? Then you’ll love this!” That could be some stiff competition.

Even with the competition, I’m sticking with Starbucks. CEO Howard Schultz is a tiger, and the plan that the company has in mind for the next year looks solid. While the stock is trading near its all-time high, I still think it’s worth a look.

The article Starbucks Is Still a Winner originally appeared on Fool.com.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Panera Bread and Starbucks.

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