Starbucks Partners UberEats to Start Delivery Service in Miami

In a bid to drive sales, Starbucks Corporation SBUX has partnered with UberEats to enable seamless Starbucks Experience. Per the partnership, Starbucks lovers in Miami will be able to order coffee and food from more than 100 stores via UberEats. The food items include sandwiches, breakfast, wraps, pastries and protein boxes among others.

This apart, digital initiatives like mobile order/pay, delivery services and third-party loyalty partnerships should stimulate the company’s robust sales trends in the Americas segment. In fiscal 2017, this division (accounting for 70% of the total revenues) posted 3% comps growth, down from 6% in the year-ago period. Also, in the first nine months of fiscal 2018, the Americas segment reported 2% comps growth, down from 4% in the year-ago period.

Recently, Starbucks also announced a historic partnership with and Alibaba in order to provide seamless Starbucks Experience. Starbucks will begin delivery services in Beijing and Shanghai next month via Alibaba's Ele.me platform. By the end of fiscal 2018, the  company expects to roll out 2,000 stores across 30 cities in China.

Innovation & Digitalization to Drive Growth

The Zacks Rank #3 (Hold) company’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program, digital offerings and product innovations will continue to drive growth in the long run.

Meanwhile, the company is strengthening its product portfolio with significant innovation around beverages, refreshment, health and wellness, tea and core food offerings. Evidently, beverage innovations have been a significant contributor to comps growth for Starbucks over the years. Apart from the numerous beverage innovations, Starbucks’ efforts to offer more nutritional and healthy products to its customers are commendable.

In the past three months, shares of Starbucks have lost 3.6% compared with the industry’s 0.5% decline.

Key Picks

Better-ranked stocks in the same space include BJ's Restaurants, Inc. BJRI, Darden Restaurants, Inc. DRI and Dine Brands Global, Inc. DIN. While BJ's Restaurants sports a Zacks Rank #1 (Strong Buy), Darden Restaurants and Dine Brands Global carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BJ's Restaurants earnings have surpassed the Zacks Consensus Estimate by an average of 6.4% in three of the trailing four quarters.

Darden Restaurants delivered better-than-expected earnings in the preceding four quarters, with an average beat of 3.1%.

Dine Brands Global reported better-than-expected earnings in the trailing four quarters, with an average beat of 8.1%.

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