Updated at 9:56am EST
door board (CRASH) – Get a free report shares rose on Tuesday after the group revealed plans to expand its delivery partnership with Starbucks (SEX) – Get a free report nationwide for the next three months.
Starbucks and DoorDash said they plan to expand their delivery service to all fifty US states by the end of the first quarter, beginning with launches in Northern California, Texas, Georgia and Florida.
Expanded partnership could offset Amazon’s impact (AMZN) – Get a free report possible purchase of a 15% stake in Grubhub, the US division of European Just Eat Takeaway (TKAYF) whether its recently introduced promotion, which includes free delivery on orders over $12 in the 4,000 cities that Grubhub operates, attracts enough customers for the online retailer.
Starbucks, meanwhile, may be looking to offset the impact of slowing sales in China, where the country’s Covid crisis led to the weakest annual GDP growth in more than five decades last year, taking advantage of strong US sales. and adapting to changing patterns of work and travel. in the post-pandemic economy.
“As customer behaviors evolve, we continue to innovate the Starbucks Experience to connect with them through meaningful and valuable digital experiences,” said Brooke O’Berry, Senior Vice President of Starbucks. “Our partnership with DoorDash allows us to provide our customers with another convenient way to enjoy Starbucks wherever they are.
“Home delivery continues to be a significant growth opportunity for Starbucks, and we are excited to reach more customers by partnering with DoorDash, a company known for its best-in-class service,” he added.
DoorDash shares rose 0.7% in early trading on Tuesday on news that the expanded partnership would change hands at $52.72 apiece. Meanwhile, Starbucks shares fell 0.6% to $106.59 apiece.
Starbucks said in November that U.S. comparable sales rose 11% for the three months ending in September, the group’s fiscal fourth quarter, helping overall revenue rise 3.1% to $8,400. million and daily store traffic was around 95% of what it was before. pandemic levels.
Non-GAAP earnings fell 19% to 81 cents a share, but beat Street’s forecasts thanks in part to “elevated pricing measures taken throughout the year.”
“We anticipate that the current COVID-related uncertainty will continue, and we repeat that while our long-term aspirations for China are undiminished, we expect the recovery of our business in the country to be non-linear,” said interim CEO Howard Schulz.
