SBUX

[rffrydr]

So there is the $3 cup of coffee the old timers laugh at. My neighbor goes out of his way for the Arco Fillup--and my SBUX toting friends have been pushed to that on occasion think the coffee there is satisfactory.

But of course it's a lifestyle question, built on the core of their business, selling drugs. As drugs go this is cheap. Esp relative to cigarettes. If you doubt just check out what SBUX success has done the the Jamba Juice menu (all new Brazilian guanara (sic) caffeine nut) or the proliferation of SBUX drive-thrus. When you got to idle your car in line that can only mean one thing: you're hooked.

Speaking of which, they've made their move on the liquor aisle of your neighborhood RiteAid--going after the creme-liquour market where they're actually the low-cost leader! (next to Prince Charles' private reserve).

Remember when they were going to be a Web Portal??? Big price drop. But now they're getting into the new Movie distribution pipeline with the Bee. Wow.

Which begs the question of whether SBUX can accomodate the non-drinkers such as myself, asian asians and the children for another leg up. The Strawberry/Creme has gone along way for the kids. And the green tea blackberry frap's a hit in Asian San Gabriel Valley. Was just in first SBUX here with Chinese signage. The teas all come first. Apparently, offshore, there's some problem with the "10,000" permutations of orders. No-one likes to feel stuped. Esp. when a "tall" is a small. They also have "kid" sizes. I've seen mothers shopping in Target with all the kids with SBUX cups. I wonder if frapps or chai are considered acceptable drinks for kids these days.

As for myself: I've been sucked in via my friends. I've found accomodations with the Venti Vanilla Creme 3.75 with premium top of whipped creme, and ample additions of half-n-half and nutmeg. SBUX probably doesn't count on these quanties of "extras" but makes for one of the best milk shake values around.


And there employee committment makes for high level of quality control (against Coffee Bean).

Hard to step in front of this. As likely as not they'll be last down. But do you see em trying to sell off today? Sooooo cute!

[rffrydr]

Starbucks Founder Blends In With Sellers
By CATHERINE SHU

Insider Tables: Buyers | Sellers

INSIDERS AT STARBUCKS HAVE POURED their hearts into selling the company's shares over the past two months as the stock comes off a 52-week high, which it hit in early May.

Since May 8, five Starbucks insiders, including founder and Chairman Howard Schultz and Chief Financial Officer Michael Casey, have either sold, or exercised their options to sell, a total of $75.1 million in shares. The bulk of the selling was done by Schultz, who exercised his options to sell 1.7 million shares for a total of $62.1 million.

After the sales, Schultz has 15.6 million Starbucks shares and options for 15 million shares. Combined, he holds 4% of all outstanding shares. Casey still has 76,768 shares and options for 1.8 million shares, or less than 1% of outstanding shares.

Shares of Starbucks are currently trading about 11% off a 52-week intraday high of $39.88 on May 5.

After the market closed last Thursday, Starbucks announced that its June same-store sales rose 6%, meeting the company's growth forecast but just missing the consensus expectation for growth of 7%. The stock took a hit on Friday morning, but recovered to end the day up 0.3% at $36.04, and has been trading around that since. Shares closed at $35.98 Tuesday.

Mark LoPresti, senior quantitative analyst at Thomson Financial, says that the string of sale transactions over the past two months is the second-largest patch of selling in the past five years.

The biggest insider sales were between October and December 2004, when six insiders at the company, including director James Shennan and Starbucks U.S. president James Alling, sold or exercised and sold about $144 million worth of shares at around $31 per share, right before the stock began a steady descent to a low of $23 last September.

Shennan and Alling also sold shares this year in May and June.

"The point is that the last time the selling was heavy, the stock was underwater for most of the year," LoPresti says. "Investors may find a better place to park their money with more momentum, if [Starbucks stock] might stall for a little while."

LoPresti also notes that nearly all of the sales in late 2004 were options-related and altogether insiders made roughly $103 million in profits off those options, compared to the current round of selling, where insiders have already pulled more than $60 million in profits from their options.

LoPresti says that the most recent sales aren't really just profit-taking "if you believe [insiders] are doing as much as they can to maximize their premiums. They are very price-conscious, and they know when their stock has a significant amount of premium built in."

Deutsche Bank analyst Marc Greenberg initiated coverage of Starbucks at Hold, noting that while Starbucks enjoys a "relatively loyal and price-insensitive customer base" along with a "track record of explosive growth," he expects "a natural, gradual slowing of the company's growth rates in the near term to temper upside for shares, with potential modest downside."

UBS Investment Research analyst David Palmer, who downgraded Starbucks last week to Neutral from Buy, cited valuation concerns. "Today's relative price/earnings multiple of three times (near a five-year high) could be difficult to maintain with slowing same-store sales momentum," Palmer wrote.

Starbucks did not respond to a call seeking comment.

Joshua Hong, director of research at InsiderScoop.com, however, notes that the options founder Schultz has exercised over the past two months, which were issued in 1999 at an exercise price of $4.13 each, were slated to expire two months from now in late September.

"If he sold his other positions, then it could be a bad signal, but this looks like it's a normal exercising of shares," says Hong.

Michael Painchaud, managing director of research at Market Profile Theorems, says that insiders at Starbucks have "a bias to the sell-side," noting that out of 1,620 insider transactions at the company since 1992, only 40 have been purchases.

"If you had sold as an investor during all those years, you would have made less money than if you had held on to now," Painchaud notes.

Ben Silverman, director of research at InsiderScore.com, lauds Starbucks' continued "strong operating record," but adds that "the lesson here is to keep an eye on [Starbucks insiders] because they seem to have a decent history of predicting highs for the stock based on their selling activity."

He adds that while Starbucks investors may have missed the May high, "moving forward it's worth it for shareholders to keep an eye on [insider selling] if they are looking to lock in some gains."

[rffrydr]

This 6% comps figure is the same as "missed" last month wherein price held fim. I don't drink coffee but spend a fair amount of time there for the wireless (just not the same at McDonalds).

Nonetheless I give them credit for quality and quality control across a wide range of territories. Places like Manteca, CA, can be your only link with the "big city" feel. The loud, ungramanatical, ill-trained ol' Muleskinner they had running the Barnes and Noble cafe in Palm Spings gives me pause however, that they can maintain this almost magical "barista" quality level. A regional rep. was there trying to "coax" in the right direction, but clear it was hopeless. Can management be this nice?

Have bragged the Vanilla Bean Frap with malt and creme is the successor to the ol-time burger-stand handscooped milkshake but the Banana Creme is awful, made of syrup. Juice jus doesn't "feel" right in a dark room of coffee colors and aroma. Santa Monica is "remodeling" after what? two years: the obviious intent is to streamline customer purchases by pulling lounge environment: substituting benches and more counter.

How "discretionary" the spending that drives their (drug) product remains to be seen. I can buy Sbux fraps all day long at WalMart--but I can't buy the cup.

Is this the McDonald's of a new generation? Don't think so--but it's priced like it.

[HenryTo]

The latest Frappucino introductions include the banana creme, the banana coconut, and a mix-and-match with caramel, etc. A month later, they came out with the tangerine - which they are trying very hard to push. My sense is that no-one would buy "fruity" drinks at SBUX - myself included.

I was at the local SBUX at 4pm yesterday and the place was jam-packed - simply amazing. One does wonder where further same-store sales growth would come from, given today's situation. Of course, SBUX could raise prices, but it's probably not a good strategy in our current slowing economy.
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Starbucks Shares Fall on Weak June Sales
Friday July 7, 11:04 am ET
Starbucks Shares Tumble As June Same-Store Sales Miss Street Estimates, Analyst Downgrades Stock

NEW YORK (AP) -- Shares of coffee-chain operator Starbucks Corp. plummeted Friday as the coffee-chain operator reported June same-store sales which missed Wall Street's expectations and an analyst downgraded the stock.

Same-store sales, or sales in stores open at least one year, are a widely used gauge of industry performance.

Shares of the company dropped $2.60, or 6.9 percent, to $35.28 during morning trading on the Nasdaq. The stock has traded in a 52-week range of $23.01 and $39.88.

UBS analyst David Palmer said the company's June same-store sales growth of 6 percent was below his forecast of 8 percent growth. Analysts, on average, expected same-store sales to rise 7 percent.

"We are lowering our fourth quarter same-store sales forecast to 6 percent from 8 percent due to a lower expected boost from new Frappucino intros, which to do not seem to be as incremental as we had hoped," he wrote in a July 7 note to clients.

Palmer downgraded the stock to "Neutral" from "Buy" based on slowing sales momentum.

On the other hand, J.P. Morgan analyst John Ivankoe, who rates Starbucks as "Neutral," said that although same-store sales did not meet expectations, "results are still solid, as they represent mostly transaction growth combined with modest mix and minimal pricing benefit," he wrote in a July 6 note.

"Year to date stock performance has been deservedly strong driven by solid comps and earnings against very tough year ago comparisons in what is proving to be a tough consumer environment," Ivankoe wrote. "While solid comp and earnings visibility will likely support the current valuation, we rate shares Neutral as we see limited opportunity for sustained multiple expansion."

In the year-ago period, the company saw its June same-store sales rise 7 percent.

[rffrydr]

Ye, of little faith.
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Yeah, tough reversal. Unless this was really the end, I think the .25 is BEARISH. It will take us back to the uncertainty on the cycle. Today was an end-of-quarter effect. Another 75K on the jobs next week and things'll get more interesting.

Right now, I'll let the calls take me short SBUX.

[nodoodahs]

Stopped out above 50 DMA. May revisit later.
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[rffrydr]

Me too: sold the jan 35's ((4+) this morn. Still have a hard time fighting this nation's premiere drug company. It'll be interesting as they try to become an entainment company. Y'can't beat the margins "selling shadows on a wall." But the Media thing is often topmaking.

http://www.mercurynews.com/mld/mercurynews/news/breaking_news/14655742.htm

"This is continuing our commitment to providing customers with compelling family entertainment titles," Starbucks Entertainment President Ken Lombard told The Associated Press on Tuesday.

http://www.latimes.com/entertainment/news/la-fi-starbucks1may01,1,2889736.story?coll=la-headlines-entnews&track=crosspromo

[nodoodahs]

Just got short on SBUX. Technically looks much nearer resistance than support. I will probably use the north side of $37 as a stop ...
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[HenryTo]

MCD had great management and a great visionary but above all, it was the right business to be in at the right place and at the right time.

SBUX was also at the right place at the right time - and I believe the trend hasn't totally played itself out yet. Just like the collapse of the Nifty Fifty in 1973 to 1974 when MCD was a buy, SBUX is still a buy at the bottom of the next bear market (when P/E has shrunk to 10 or below).

That being said, I am now typing this from the nearby SBUX and it is starting to turn into a Mikey Dee's atmosphere. It wasn't like this eight years ago - heck not even a couple of years ago. I can't focus or concentrate here as much as I have been previously able to. Maybe they should raise coffee prices by 50% across the board....

[rffrydr]

Goin' Hollywood:

http://www.latimes.com/business/custom/cotown/la-fi-starbucks2jun02,1,6746005.story?coll=la-headlines-business-enter

"The Biz" is a dangerous business.

[rffrydr]

Comps today should have been much better with the intro of "soft-core" drinks for us non-addicts. And they look good. The Tazo/Blackberry is shooting for the under-represented (wannabe represented) asian market.

[HenryTo]

Both SBUX and BBY have been on a tear since early October of last year - and like I said before, are definitely the ones to watch in the consumer discretionary sector (XLY). Once these two stocks start turning down (SBUX down four days in a row now), then it is over for the consumer which in turn most probably means that the stock market has topped out (at least for this year).

The VIX closed up 6% today, while the NYSE ARMS Index hit a one-day reading of 1.38. The NYSE McClellan Oscillator turned negative with a reading of -66.75. Unfortunately, this is not what bottoms are made of - even the temporary ones (although the NASDAQ Composite is definitely pretty oversold).

[rffrydr]

http://stockcharts.com/h-sc/ui?s=SBUX&p=W&b=5&g=0&id=p33091467664

God bless, Henry.

[nodoodahs]

I didn't like the valuation in December. Sorry, folks!
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[HenryTo]

Yes - SBUX still remains the stock (along with BBY) to watch for signs of slowing consumer spending:
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Starbucks profit up, April sales disappoint
Wed May 3, 2006 4:42pm ET

LOS ANGELES (Reuters) - Starbucks Corp. (SBUX.O: Quote, Profile, Research) on Wednesday reported higher quarterly earnings due to more stores and an annual sale of coffee-making equipment, but April sales at established stores were toward the low end of Wall Street targets.

Shares fell to $36.75 in after hours trade from a Nasdaq close of $37.35.

The company said April same-store sales, known as 'comps' in the industry, rose 6 percent. Three Wall Street analysts' forecasts had ranged from increases of 6 percent to 9 percent.

"Short-term investors may view a 6 percent comp as a hiccup," said ThinkEquity Partners analyst Nicole Miller, who has a "buy" rating on Starbucks shares. "We feel comfortable with that number. It's still a number that can easily provide leverage to the bottom line."

Net income in the fiscal second quarter rose to $127 million, or 16 cents per share, from $100 million, or 12 cents per share, a year ago.

Wall Street analysts had expected the fast-growing company to report earnings of between 14 cents and 16 cents per share with an average view of 14 cents per share, according to Reuters Estimates.

Starbucks said it still expects monthly same-store sales increases for the remainder of this year to be in line with its long-term forecast of between 3 percent and 7 percent, including some "monthly anomalies." The company, however, has a track record of exceeding that goal.

It also raised its full-year earnings target to a range of 71 cents to 72 cents per share from the prior range of 68 cents to 70 cents. although its fiscal third and fourth-quarter targets were broadly in line with Wall Street.

Starbucks, the world's largest coffee shop chain, has been working to drive sales momentum in its flagship U.S. business by adding lunch items like sandwiches and salads. It is also benefiting from sales of CDs.

Starbucks shares closed at $37.35 Wednesday on Nasdaq. The stock trades at 44 times analysts' average 2007 earnings estimate, compared with an average multiple of 18.5 for other companies in the Dow Jones U.S. restaurants and bars index