Starbucks (SBUX) Expands Augusta Plant, Invests $120 Million

Starbucks Corporation (NASDAQ:SBUX) is expanding its Georgia-based Augusta Soluble Plant by investing around $120 million. This will nearly double the size of operations and create up to 100 new jobs.

Expansion Details

The 140,000-square feet expansion is expected to be completed by fall 2019. Six new whole bean roasters will be added to this soluble products facility.

Also, Starbucks will be recruiting people coming out of military service, in line with the company’s aim to employ 25,000 military veterans and their spouses by 2025. Currently, one out of every six Augusta employees is an armed force veteran or military spouse. Starbucks has already achieved its target to hire 10,000 service members, veterans and military spouses by 2018.

The announcement is in sync with management’s focus on boosting the company’s global market share through store openings in new and existing markets, remodeling existing stores, deploying technology, controlling costs and aggressive product innovation and brand building.

As part of its long-term growth strategy, this Seattle-based coffee chain plans to open 12,000 new stores globally and 3,400 in the U.S. by 2021. The new stores will boost Starbucks’ unit count by 50%.

Recently, in Jun 2017, the company had expanded its Carson Valley Roasting Plant and Distribution Center in Minden by putting in $170 million and creating over 200 jobs.

Stock Performance

Starbucks’ shares have gained 3.8% so far this year, comparing unfavorably with the 9% growth of the Zacks categorized Retail-Food & Restaurants industry. The company's tepid comps growth in the U.S., owing to soft retail and consumer spending, is marring prospects. Nonetheless, Starbucks’ solid execution of several initiatives in the U.S., best-in-class loyalty programs and digital offerings are expected to drive profits.

Its three-to-five year expected EPS growth rate is pegged at a solid 17.8%.

Zacks Rank & Stocks Worth to Look

Starbucks currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in this industry include Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) , Fogo de Chao, Inc. (NASDAQ:FOGO) and Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) .

Dave & Buster's sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dave & Buster's earnings are likely to grow 23.2% in fiscal 2018.

Fogo de Chao, a Zacks Rank #2 (Buy) stock, is expected to witness 6.4% growth in 2017 earnings.

For Red Robin Gourmet – also a Zacks Rank #2 stock – saw its earnings estimates move 4.4% north for 2017.

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