Dumb Starbucks, smart Starbucks

The coffee chain can be the butt of a little joke and still bring home strong results for investors.

By Motley Fool Investor Beat Feb 11, 2014 3:17PM
Starbucks (SBUX) received some unusual media attention at the opening of a parody store, Dumb Starbucks, in Los Angeles this week as one comedian's promotion for a show on Comedy Central.

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.
Caption: Starbucks sign hanging in the window of their coffee shop store in Seattle, Wash.
Credit: © KPA Zuma Press/Rex Features
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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Tags: SBUX
11Comments
Feb 11, 2014 8:36PM
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I think Starbucks is a very well run company with a high level of quality, given their volume. Of course, this opinion comes from a plumber. I'm one of those sheeple that gets paid serious money for incidents involving brown poop water.
Feb 11, 2014 7:40PM
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The only thing dumb about Starbucks is the number of sheeple who pay serious money for that brown poop water !!!!!
Feb 11, 2014 8:28PM
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The Comedian who did the parody should have called it StarSucks!  The Prices suck your wallet dry!
Feb 11, 2014 8:23PM
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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!   

Feb 12, 2014 12:17PM
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Sure, they bill themselves as all green and fair trade while thousands of gallons of gasoline are burned idling in their drive through windows.  
Feb 12, 2014 12:15PM
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Love them or hate them (I think they're mainly the dregs), Starbucks single-handedly changed America's perception of coffee and forced everyone else to up their game to compete. Coffee is no longer the over-extracted, percolated, bitter brown beverage of our parents.

Starbucks did it alone.
Feb 12, 2014 10:46AM
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Starbucks doesn't sell coffee, they sell a habit forming experience. people enjoy the prompt service and the caffeine and sugar rush triggers a pleasurable experience that brings people back, again and again. The power of Habit controls a great deal of our lives and once a habit is formed it's hard to break. The founder of Starbucks is clearly a marketing genius, though I've never been to one, it just seams like a rip off.
Feb 12, 2014 11:12AM
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With inventions like the Keurig who needs starbucks.

$10 for 1 cup of coffee
or
$10 for 12 cups of coffee


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