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How Starbucks Is Expanding Its Business

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Jan. 15 2018, Updated 7:37 a.m. ET

Current operations

By the end of fiscal 2017, Starbucks (SBUX) operated 27,339 restaurants overall, which includes 13,275 company-owned restaurants and 14,064 franchised restaurants.

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Fiscal 2017-unit growth

In fiscal 2017, Starbucks added 2,254 restaurants, which represents growth of 9.0% from its 25,085 restaurants in fiscal 2016. The addition of new restaurants includes 564 company-owned restaurants and 1,690 franchised restaurants.

Americas: In fiscal 2017, the segment added 394 restaurants, which includes opening 422 new restaurants, closing 39 units, and refranchising 11 restaurants in Canada. By the end of fiscal 2017, the company operated 9,413 company-owned restaurants. It added 558 franchised restaurants to increase its unit count to 7,146 restaurants.

China/Asia-Pacific: In fiscal 2017, the segment net-added 259 company-owned restaurants, which includes opening 424 company-owned restaurants, closing 32 restaurants, and refranchising 133 company-owned restaurants in Singapore. By the end of fiscal 2017, the company operated 1,540 company-owned restaurants. The segment net-added 777 franchised restaurants to increase the unit count to 3,070 franchised restaurants by the end of fiscal 2017.

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EMEA (Europe, the Middle East, and Africa): In fiscal 2017, the unit count of company-owned restaurants declined by 21 units. During the period, the company closed 21 units and refranchised 14 units in the United Kingdom. However, some of the declines were offset by the opening of 16 new company-owned restaurants. The segment has net-added 353 franchised restaurants to increase the unit count of franchised restaurants to 2,472 units.

Others: By the end of fiscal 2017, the segment operated 290 company-owned restaurants and 37 franchised restaurants. Compared to fiscal 2016, the unit count of company-owned restaurants declined by 68 units. During the period, the company closed 67 Teavana stores and two Evolution Fresh stores. It also opened one Siren Retail store. In August 2017, the company announced the closure of its 379 Teavana stores by spring 2018. In fiscal 2017, the company net-added two franchised restaurants to increase the unit count of franchised restaurants to 37 units by the end of fiscal 2017.

Peer comparisons

During the same period, McDonald’s (MCD), Domino’s Pizza (DPZ), and Dunkin’ Donuts—operating under Dunkin’ Brands (DNKN)—added 361 units, 1,182 units, and 427 units, respectively.

Next, we’ll look at analysts’ revenue estimate for fiscal 2018.

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