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Starbucks earnings: Well-positioned for global growth, but same-store sales a concern

Starbucks expansion prospects are good though experts are keeping an eye on same-store sales

Starbucks Corp. is expected to report third-quarter earnings on Thursday after the closing bell. For some experts and analysts, same-store sales will be the focus.

“If there were one concern, it would be slowing [same]-store sales, which were only 3% globally in 2Q,” according to Frost Investment Advisors senior research analysts AB Mendez and John Lutz.

Those concerns are eased by product diversity and store expansion, with the company expecting 12,000 locations by 2021.

“[W]e’re confident that they can maintain the current rate of growth and perhaps even slightly reaccelerate the [same-store sales] growth rate if they can gain traction with some of their newer concepts like Reserve stores, Reserve bars, and Teavana tea stores,” Mendez and Lutz said.

In a June note, RBC Capital Markets analysts led by David Palmer said increased use of digital services such as mobile pay, customer engagement, beverage innovation, and other factors could lead to “a return to mid-single digit...