The worst is over for Starbucksin Europe, and the company is confident that it can continue to handle a challenging economic environment, CEO Howard Schultz told CNBC’s “Squawk on the Street” on Thursday.
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Starbucks
While Schultz said he didn’t want to overstate the case, he noted, “We’re beginning to see glimpses of optimism in terms of the strategy we have in place (in Europe).”
The game plan Starbucks had in its U.S. transformation is being applied to Europe, Schultz said. “I’d suggest the worst is over for Starbucks in Europe,” he added, but cautioned that it’s still going to be a long-term strategy. (Read More:Starbucks Earnings Fall Short of Street's Expectations.)
Schultz also said that business in China and elsewhere in Asia remains strong and that Starbucks is confident in the U.S. economy and “its ability to navigate any economic challenges.”
Starbucks also continues to expand its product line. On Thursday, Starbucks rolled out its new single-serve coffee brewer, Verismo. It’s the first machine that makes brewed coffee, espresso and latte with fresh milk.
Schultz called the launch a great economic proposition for Starbucks. Three-quarters of Starbucks customers do not yet have a home machine, and the $8 billion market is growing 100 percent a year, he noted.
Because Starbucks can interact with customers in its stores and follow up with a huge distribution network for its products, the company has a “huge competitive advantage,” Schultz said.
Schultz also said its relationship with Green Mountain Coffee will continue.
Starbucks is also moving into other businesses. After buying juice company Evolution, Schultz said, it's "interested in building a multi-billion dollar health and wellness brand in our stores.” It is also revamping its food offerings.
The mobile payments deal with Square will also put Starbucks "in a position to do things on mobile that perhaps no other consumer brand, and certainly no other retailer, has the capability to do, and you'll see that come to life in 2013," Schultz said. (Read More:Will Starbucks, Square Take Mobile Payments Mainstream?)
—By Justin Menza, CNBC News Writer
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