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Starbucks is not the most glamorous Vestact-recommended stock, they just sell coffee, after all. But that's an honest business to be in, with good prospects, because caffeinated beverages are more popular now than ever.
Most of Starbucks' stores are in the US (about 15 700), Europe (close to 2 500) and China (around 6 000). Interestingly, there are 1 000 shops in the city of Shanghai alone.
In the results the group released for the third quarter, comparable (13-week) revenues rose 11% to a record $8.4 billion. That's due to a very good period in North America, offsetting a quiet time in China due to lockdowns.
In a tight labour market, the company is working hard to keep their baristas and other employees happy. They offer many financial benefits and free college tuition. They have enhanced sick pay and mental health support, as well as maternity and paternity benefits.
In September, the company announced that Laxman Narasimhan will become the company's next CEO. He's already on board, working closely with Howard Schultz, interim CEO until April 2023. He's my age (55 years) and was previously Chief Commercial Officer of PepsiCo, and chief executive officer of Reckitt. A talented guy, clearly!
Starbucks was trading at about $118 a year ago, and fell to $68 a share in June. It's bounced back up since then, to around $92 a share now. Let's continue to hold them and see where they can get to next year, in a more normalised economic environment.
