Research archive for SBUX

Starbucks is a Vestact-recommended stock, because people like caffeinated drinks. We've owned this company since February 2013, when we advised clients to sell Coca-Cola and buy Starbucks instead.

Starbucks was one of many stocks to report its results last week. Happily, the coffee company posted market-beating numbers. This set of earnings was a bit messy because their various operating regions have been affected differently by post-Covid reopening.

Starbucks released their second quarter results on Tuesday night, amongst many other Vestact stocks. The numbers looked good. Global sales increased 15% driven by a 91% increase from China. The comparable period included the Chinese lockdown. Comparable sales in the US grew by 9%.

I really like coffee. Do you too? Most people like a hot drink, especially in the morning. The caffeine gives one a boost. I'm especially fond of a cappuccino with friends after an early morning run.

Starbucks was another business from a long list which reported earnings on Thursday last week. The company hasn't received much attention this year, probably because it isn't sexy like the technology companies. Also, the share price is down around 3% for the year. Given how global lockdowns and working from home have impacted the food sector, Starbucks has done really well to remain flat in 2020. For their latest quarter, the company beat analyst estimations, it posted revenue of $6.2bn ($6bn was expected) and EPS of 52c (31c was expected).

The Covid-19 pandemic has been very brutal to quick-service restaurant businesses, and the Seattle based coffee giant is no exception. Starbucks reported its third quarter numbers showing its steepest per share losses in more than a decade. It was due to slowing sales and increased costs arising from the pandemic. The market celebrated these results with the share price up 6% after the announcement; the worst is over for Starbucks it seems.

Last night Starbucks reported Q2 results. This company is quite obviously heavily impacted by COVID 19. Let's start with the bad news.

Restaurants and coffee shops around the world are almost all closed right now. In some countries they are allowed to deliver to homes through businesses like Uber Eats or supply kerbside pick-up service.

On Tuesday evening Starbucks reported their Q1 numbers. The company made more money than analysts were expecting but had slightly less revenue - a top-line miss with a bottom-line beat. Even though the earnings report looked solid, the stock dropped 2% yesterday. With something like jewellery or handbags, if there is pent up demand due to the China shutdown, those customers will come back after the shutdown and still spend all that money. Looking at coffee though, if you don't buy a drink today, you won't go and buy two tomorrow. For Starbucks, over half of its Chinese stores have been closed due to the coronavirus. Those sales will be lost forever.

Seattle-based coffee juggernaut Starbucks released their earnings for the quarter ending in September saying that the company now operates over 31 256 stores across 70 countries. The loyalty programme continues to keep those same-store sales very strong, both in the US and China.

Starbucks has had an interesting couple of years. More than half of Vestact clients in New York own this stock. Although we generally avoid retailers in US portfolios, affluent urban-dwellers drinking more coffee seems to be a major global trend.

You heard of cloud kitchens right? They are kitchens built for the sole purpose of online delivery. This allows them to be located in cheaper areas, have less staff and less space. That in turn makes them cheaper than normal restaurants. It is a very smart concept.

We have written before about the cash flow boost that Starbucks gets from its loyalty program. Currently, they have $1.6 billion in cash from people preloading their Starbucks app with money. What a brilliant business model! People pay you now for products that they will use in the future. In effect it is an interest-free loan to the company.

Seattle-based coffee giant Starbucks is another core recommended stock in Vestact New York portfolios. On Thursday night last week they published their second quarter numbers. They were very good, lifting the outlook for annual revenues and profits. Starbucks stock rose 9% on Friday, coming to within a whisker of $100 a share. Wow!

If you are one of our 272 customers who own Starbucks shares, treat yourself to an extra cup of coffee at your nearest store this morning. The company was out with pleasing Q1 results last night, and the stock rallied to a new all-time high after-hours, of around $78 per share.