Starbucks and Peet's have similar gross margins. Dunkin' Brands has a much better gross margin at 78.9%, while McDonalds has a lower gross margin at 39.6%. Starbucks' gross margin might put it in the middle of the pack for quick service, but it is still a healthy margin. The company is profitable, something most of the firms in the industry are. Interesting, Dunkin is the least profitable of these four companies, and McDonalds has a high net margin. This is reflected is an ROE for that company of just 5%, compared with Starbucks' ROE of 27.69% and McDonalds' 39.8%. For the equity investor, Starbucks again has a strong ROE but not the strongest in its industry.

Starbucks continues to have premium positioning in the industry. This should allow the company to earn higher margins and returns. While this is not necessarily the case, the strategic moves that Starbucks has made...
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