Starbucks' (SBUX) Pumpkin Spice Latte Back In Stores

The world’s largest coffee-shop chain Starbucks Corp.’s (NASDAQ:SBUX) has announced the official release of the classic fall drink, the Pumpkin Spice Latte or PSL. This marked the 13th consecutive launch of PSL – undisputedly the most popular seasonal beverage.

PSL & Chile Mocha: Fall Attractions

Although a few lucky customers have been able to score a cup of PSL as early as Sep 1 through a secret code, the drink hit the stores on Sep 6 – the same day on which Starbucks launched Chile Mocha, a new seasonal drink.

PSL has been a hot favorite for years, having sold 200 million cups since its debut in 2003. This year, this cinnamon-sweetened coffee will share the racks with Chile Mocha.

PSL is a concoction of espresso, milk, Pumpkin Spice Flavored Sauce, Whipped Cream, Starbucks Vanilla Syrup and Pumpkin Spice Topping. The beverage also contains ingredients like sugar, condensed skim milk, pumpkin puree, fruit and vegetable juice for color and spices including cinnamon, ginger, nutmeg and clove.

The launch of PSL closely followed McDonald's Corp.’s (NYSE:MCD) re-launch of McCafe Pumpkin Spice Latte. Even Dunkin' Brands Group, Inc.’s (NASDAQ:DNKN) pumpkin-flavored coffee re-launch might have prompted the PSL comeback.

Meanwhile, the Chile Mocha drink – “inspired by mole, horchata and a thick Mexican drink called champurrado,” – will serve customers as a new fall drink. It is a spicy drink containing ancho chile and cayenne along with chocolate.

The Chile Mocha drink is topped with cayenne, ancho chile, paprika, cinnamon, sea salt and a sprinkle of sugar. It's the right mix of sweet and spicy that's evocative of Mexican hot chocolate.

Q3 Recall

We note that third-quarter sales increased 7% year over year as higher sales in China and the Channel Development segment counterbalanced a slowdown in sales in the U.S. and Europe.

Same-store sales (comps) grew 4%, less than 6% recorded in the previous quarter, due to cooling global traffic trends. Global traffic was flat in the quarter, comparing unfavorably with the 2% increase in the previous quarter. Average ticket growth remained unchanged at 4% in the quarter.

Meanwhile, it is to be seen whether the PSL comeback and new launch manage to rake in profits for the company.

Starbucks carries a Zacks Rank #3 (Hold). A better-ranked stock in the sector is Del Taco Restaurants, Inc. (NASDAQ:TACO) with a Zacks Rank #2 (Buy).

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