Dumb Starbucks, smart Starbucks
The coffee chain can be the butt of a little joke and still bring home strong results for investors.
While the publicity stunt attracted throngs of people to witness the joke and enjoy free coffee, it did little to affect the momentum of the company, which brought home very strong results for investors over the holiday quarter.
In an atmosphere where many retailers are complaining of a decline in foot traffic at the moment, this isn't the case for Starbucks, which saw strength not only in its core U.S. market, but in the Asia-Pacific and European markets as well.
And, whereas the paradigm shift towards e-tail online shopping is impacting many brick-and-mortar retailers negatively at the moment, Starbucks seems largely unaffected by the trend.
In this video, Motley Fool analyst Mike Finarelli talks with host Mark Reeth about Starbucks' prospects going forward, and says he's a buyer at today's prices. The company may seem a little pricey (after normalizing its currently skewed-looking P/E ratio to account for its settlement with Kraft), but Mike still sees an enormous potential for growth here. Not just with the new stores it plans to open as the company expands further in China and the broader Asia-Pacific region, he also sees a number of levers the company has at its disposal that can continue to drive healthy same-store sales growth for its existing stores. He expects investors will continue to see robust growth with Starbucks for years to come.
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Most of the Starbucks I see are usually crowded (Asian study halls near some college campuse such as San Diego State Univ. and UC San Diego) --- they should be called Fourbucks considering the cost of many of the drinks. Yikes!
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The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
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