Research archive for SBUX

There was the inevitable announcement that came, still Mr. Market did not take that kindly, the stock is down over three percent in the aftermarket. Starbucks Announces New Leadership Structure to Drive Next Wave of Global Growth. Howard Schultz is handing over the baton to Kevin Johnson, who is currently the Chief Operating Officer of Starbucks.

Starbucks reported results for their fourth quarter and full year last evening after the bell. The stock has had a pretty awful year-to-date performance, down 13 percent. Over the last decade however, the stock is up 183 percent. Coffee drinking is more than just that. For some people it is an art. Michael used to have a flatmate that took it to the nth degree, cold brewing overnight. Some people grow tomatoes, some people brew their own beer, some people roast their own coffee beans.

At the end of last week we had 3Q numbers from Starbucks, which missed some analyst estimates. To say that they missed estimates is not to say they had a poor quarter, they still grew revenues by 7.3% to $5.24 billion and grew EPS by 24% (not too shabby hey nige).

Last Thursday night we received second quarter results from Starbucks. But before we delve into the numbers let us look at some of the hype created here in South Africa after the first Starbucks was opened in Rosebank. Check out the SAStarbucks twitter account for some pictures of the opening. Apparently there were queues until the early hours of the morning and there still are. The brand strength is incredible and the drive for quality coffee, especially in developing markets is growing like China (that analogy should be used more often, no, China is not finished, as you will no doubt see in the numbers below).

Starbucks reported numbers Thursday evening, after the US market closed. The headline from their Investor Relations page says: Starbucks Delivers Record Q1 Revenues and EPS. Many others that I read suggested that a miss and guidance lower would weigh on the stock. It did initially, pre market the stock was down three percent, that however didn't last for too long, the stock ended the Friday session up one-quarter of a percent. And to think that in the August washout the stock traded in the low 40 Dollars, currently (in the recent washout) the stock is a whisper away from 60 bucks, pretty close to the all time highs of 64 Dollars.

Starbucks, one of the Vestact recommended stocks, reported numbers post the market close last evening. It was a meet, in terms of what matters for the people who suffer from quarteritis. Quarteritis is a disease whereby you judge a company purely on the metrics of what the market analysts expect the company to earn. And you can make a sweeping statement like, they had an excellent quarter, what a stock, or rubbish quarter, rubbish stock. Eddy Elfenbein captured it perfectly in his Friday morning message, where he quoted the doyen of index investing, Jack Bogle: "The stock market is a giant distraction to the business of investing." We try and stress many times that we own companies, not share prices. The share price represents the prospects at any one given time, whether you are an investor, speculator, stapler, trader, or whatever you call yourself, that is the price and that is what someone is willing to pay. Bogle is right, at times it seems nuts.

Starbucks. Coffee. Love it. Everyone started somewhere, as we pointed out, the company started with one store in Seattle, Washington State all the way across on the West Coast of the US in 1971, by the time they listed 21 years later in 1992, they had only 165 odd stores. Currently there were 22,519 stores as at the end of the last quarter, a total of 431 net store openings in the last quarter.

Starbucks is synonymous with Coffee. Coffee is the only day time legal (or illegal for that matter) drug that nobody looks at funny. In fact, they are envious of where you got that organic hazelnut skinny latte. Results from the coffee giant were released last week: Starbucks Delivers Record Q2 Revenue and EPS. Second quarter revenues rose 18 percent to 4.6 billion Dollars, GAAP operating income increased 21 percent to 778 million Dollars, EPS on a share split adjusted basis (a 2 for one split happened on the 18th of March) grew 18 percent to 0.33 Dollars. Remembering that the share price is around 50 Dollars now.

Last night after hours we received earnings from Starbucks for their first quarter of the financial year. The numbers look good and the share price shot up 5% after hours. Lets look at the numbers.

Almost every young reader would have come across Willy Wonka, the story involving the weird owner of a factory, penned by Roald Dahl and titled "Charlie and the Chocolate Factory". Howard Schultz is not Willy Wonka, rather the CEO of Starbucks, he did however speak like the legendary fictitious chocolate maker, when the company debuted the new flagship store known as the Roastery, check the story from Time: Go Inside Starbucks' Wild New 'Willy Wonka Factory of Coffee'. Check out the official release from the company: The First Customers (and First Orders) in Starbucks Reserve Roastery and Tasting Room. Explore the pictures, it looks awesome. In other news related to the coffee company, this is awesome: Starbucks to let you preorder from your iPhone next year. We continue to add to this fast growing and exciting company.

Last night we received fourth quarter and full year results from Starbucks. Lets analyse the full year numbers. Revenues increased 11% for the year to end at $16.4bn. Global comparable sales increased 6%. This equated to operating income of $3.1bn and an operating margin of 18.7%. Earnings per share came in at $2.71. The company opened 1599 store in the year.

Starbucks announced, and you can read it on the Investor relations segment of their website that they were buying the remaining 60.5 percent of Starbucks Japan, that they do not own, via a two-step tender offer process the release says. Japanese law apparently. Japan is Starbuck's second biggest market after their home market, they have been in Japan since 1996 with their partner Sazaby League, now with over 1000 stores and providing active employment for 25 thousand folks. Wow. That is pretty big, the shops must be sizeable, people must pay more in the stores than in other places. Why do I say that? Starbucks in Japan has their fourth largest store footprint, second largest by sales, higher margins as a result of bigger orders!

Last night we received Q3 results from one of my favourite companies listed in New York, Starbucks. Before we delve into the numbers here is an extract from an article I read titled 3 reasons it's hard to hate Starbucks.

Yesterday evening we received second quarter results from Starbucks which came in line with expectations. Comparable store sales were up 6%, revenues grew 9% to $3.9 billion and operating income increased 18% to $644 million. Margins increased nicely by 130 basis points to a healthy 16.6% which is a record for the second quarter. Earnings per share came in at $0.56 which is up 17%. Earnings for the full year are estimated to come in at $2.66 for 2014 and $3.17 for 2015. That puts the stock on a 2014 PE of 27. But as you can see earnings are expected to grow by 19% which puts the stock on PE to Growth ratio (PEG) of 1.42 which is reasonable. The closer to 1 the better.

Last week Starbucks released there Q1 results which saw 12% revenue growth to a record $4.2bn. Margins also impressively expanded to 19.2% while EPS rose 25% to come in at 71c per share. Geographically they have good growth in most regions. Americas and the U.S grew 5%, Europe and the Middle East grew 5% and China/Asia Pacific grew 8%.