 |
|
| View previous topic :: View next topic |
| Author |
SBUX |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
 Posted: Mon Apr 24, 2006 9:22 am Post subject: SBUX |
 |
|
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! |
|
| Back to top |
|
 |
| Author |
SBUX Replies |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Fri Mar 09, 2012 1:45 pm Post subject: |
|
|
Morningstar on SBUX's unveiling of the Verismo system.
| Quote: | | In a somewhat surprising move Thursday, Starbucks SBUX unveiled the Verismo system, an at-home premium single-cup brewing machine with the functionality to make coffee and espresso-based beverages. The product and its accessories, which will be manufactured through a strategic partnership with privately held, Germany-based Krueger, will be available at select Starbucks locations and online in the fall. We generally view the announcement favorably, as the potentially disruptive Verismo technology could make Starbucks an even more competitive player in the rapidly growing at-home billion premium single-serve coffee category. However, we do harbor concerns that this could impair Starbucks' relationship with Green Mountain Coffee Roasters GMCR, which manufactures the successful Keurig single-cup coffee brewers and has granted Starbucks exclusive rights to be its superpremium K-Cup supplier. Although Starbucks management said it will carry both K-Cups and Verismo products at Starbucks locations, we find it hard to imagine the Keurig machine and its accessories will receive the same support as Verismo products over time. There is no immediate change to our $48 fair value estimate, as Starbucks has yet to unveil its pricing structure for the machine or its supporting coffee and milk pods. However, we remain convinced Starbucks has more opportunities to diversify its free cash flow streams than any other restaurant company we cover, and we believe its three-prong approach to the single-serve market (VIA for users who don't want an at-home brewer, K-Cups for basic brewed coffee, Verismo for more sophisticated users) makes a lot of sense. Continued market share gains in the $8 billion premium single-cup coffee category (of which half is espresso-based drinks, according to management) and the broader consumer packaged goods industry could lead to upside in our fair value estimate. Little information about the economics behind the strategic relationship with Krueger was disclosed with the initial press release, but we were pleased that management committed to its long-term goal of returning consumer packaged goods segment operating margins north of 30% over time. At first glance, Green Mountain would seem to a reasonable proxy for what to expect from the Verismo system. In 2011, Green Mountain's consolidated operating margins were 13.9%, with the KBU segment (Keurig machine and accessories) posting pretax margins of 10.7% and the SCBU segment (K-Cup and other packaged goods) delivering pretax margins of 27.3%. However, we believe the manufacturing relationship with Krueger, which wi ll require no incremental capital expenditure from the company, according to management, and a wider suite of supporting products, including milk pods for espresso-based drinks, should allow Starbucks' CPG segment to stay well ahead of Green Mountain's profitability metrics. There will be little impact to Starbucks' financials this year from the Verismo system, and we continue to expect the CPG segment to post midteen average annual growth over 2013-21 (2012 will be an abnormally strong year for the CPG segment as Starbucks moves more to a direct distribution model) and operating margins to reach the low to mid-30s by the end of the decade. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Fri Nov 11, 2011 3:18 pm Post subject: |
|
|
Morningstar on SBUX's acquisition of Evolution Fresh:
| Quote: | | On Thursday, Starbucks SBUX announced the acquisition of Evolution Fresh, a premium juice manufacturer with exclusive West Coast distribution through Whole Foods WFM and PCC, for roughly $30 million in cash. Though the transaction is small, we find it to be a notable strategic event that validates Starbucks' increasing comfort in managing its own consumer packaged goods business and gives the company a foothold in the rapidly growing $1.6 billion superpremium juice category and the broader $50 billion health and wellness sector. There is no change to our $42 fair value estimate based on this acquisition, though we plan to adjust our base-case revenue growth assumptions for Starbucks' CPG segment based on our expectations that the company will use its strong relati onships with Costco COST, Kroger KR, and Whole Foods to rapidly develop national distribution of Evolution Fresh products. In conjunction with the acquisition, Starbucks announced its intentions to introduce a retail concept that leverages the Evolution Fresh brand in early to mid-2012. In our view, the juice bar category is highly fragmented and offers meaningful market share potential for Starbucks. Category leader Jamba Juice has around 760 company-owned and franchised locations and generates around $262 million in annual revenue, but possesses a fraction of Starbucks' advertising scale and bargaining clout with suppliers. We believe there is the potential for a few hundred Starbucks health and wellness retail locations by the end of the decade. More important, the meaningful operating leverage Starbucks has enjoyed in its retail locations during the past two years through efficient best practices and scale advantages gives us confidence that the company can operate a hea lth and wellness concept more profitably than Jamba (which has posted year-to-date operating margins of just 1.4%). We are encouraged that, unlike many consumer companies, Starbucks has found new growth projects to invest in while returning cash to shareholders through dividends and buybacks. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Jul 30, 2011 9:58 pm Post subject: |
|
|
It is a contradiction to our growing two-tiered society. I guess as long as you "feel" rich. Coffee is a drug.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon Apr 18, 2011 5:41 pm Post subject: |
|
|
Sitting in SBUX now and just noticed Shultz has a book out, "Onward." Really?! Like we need a book when any blowhard CEO expounds as a "vision" whatever corner he was backed into by the numbers. Is there anything less visionary? Sorry, Shultz, you only get one vision and you already had yours. It worked for Jesus and it worked for Jobs. Take a number.
Any more books of this ilk should be sold only for charity--one charity.
The charitable Federal Reserve.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Thu Mar 10, 2011 8:40 pm Post subject: |
|
|
They've also just introduced "lollipops"...or cupcakes on a stick...or, something for kids to pester their parents about.
Frappacinos will do a better a trick here.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Thu Mar 10, 2011 3:58 pm Post subject: |
|
|
Morningstar on SBUX's entry into the single-serve market. Coincidentally, I actually tried this at the local SBUX today:
| Quote: | | On March 10, Starbucks SBUX and Green Mountain Coffee Roasters GMCR announced that they have entered into a strategic arrangement for the manufacturing, marketing, and distribution of Starbucks and Tazo tea portion packs for use in Green Mountain's Keurig single-cup brewing systems. Starbucks will be the exclusive super-premium licensed coffee provider for Keurig single-cup brewing systems, which represented 49% of total U.S. coffeemaker sales from October to December 2010, according to NPD Group estimates. We were not surprised by this announcement, as rumors about a possible partnership have been persisted since mid-February and Starbucks' management has discussed the attractivenes s of the $2 billion U.S. single-serve coffee market (according to Euromonitor, Nielsen, Starbucks, and Green Mountain estimates) several times in recent months. We believe this arrangement is a smart move for both companies and is consistent with our thoughts about Starbucks being well-positioned to evolve into a well-diversified consumer packaged goods and retail platform. There is no immediate change to our fair value estimate for Starbucks based on this announcement, as we have already forecast high-single-digit average annual revenue growth rates in Starbucks' global consumer product group over the next five years because of its expansion into single-serve and other packaged goods. However, if the partnership with Green Mountain (and other arrangements similar to last month's announcement of a partnership with hotel-room coffee provider Courtesy Products) accelerates top-line global consumer products segment growth faster than our model currently contemplates, there could be a few dollars of upside to our fair value estimate based on the free cash flow generated. Licensing arrangements tend to generate higher margins than Starbucks' domestic or international retail segments. The arrangement limits Starbucks from acquiring Green Mountain's common stock or proposing any "extraordinary transactions," which is consistent with our recent commentary that an outright acquisition of Green Mountain was unlikely for Starbucks. We view a manufacturing and distribution arrangement as a more prudent use of capital that should be accretive to shareholder value over time. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Thu Jan 27, 2011 4:11 pm Post subject: |
|
|
Morningstar on SBUX's 1Q earnings:
| Quote: | | Higher coffee input costs and transition expenses tied to its packaged goods business may be dominating the headlines following Starbucks' SBUX fiscal first-quarter results, but we believe the company remains on track to become a globally diversified retail and consumer packaged goods platform. We plan to make a few adjustments to our near-term assumptions based on the cost headwinds, but with our forecast for U.S. and international retail operating margins already at the high end of management's previous forecast for 2011, the fair value estimate impact will be negligible. The shares appear fairly valued at about 22 times forward earnings per share, an enterprise/EBITDA multiple of 11 times, and a free cash flow yield of 4.8%. Traffic-driving initiatives like the revamped Starbucks rewards card and new in-store product offerings, coupled with a restructured pricing architecture, drove impressive 7% global comparable-store sales this quarter (including a 5% lift in traffic and a 2% increase in average ticket) and puts the company on track to achieve our full-year estimates. More important, the top-line growth, coupled with cost reductions and in-store efficiencies of the past two years, continues to driving meaningful leverage at Starbucks' retail locations. Both the U.S. and international segments posted record operating margins for the quarter--21.9% and 16.3%, respectively--and we believe management's outlook for 150-200 basis points of improvement in these segments is achievable for the year. In particular, we've been impressed by Starbucks' occupancy expense leverage, as diligent rent negotiations during 2009 and 2010 appear to be paying off. We also expect the April launch of VIA single-serve coffee in Starbucks' China-based retail locations will have a positive impact on international comparable-store sales for the year. At first glance, management's revised operating margin outlook for the CPG segment may look excessive (25%-30% operating margins versus the previous outlook of 30%-35% and historical margins in the high 30s). However, we believe Starbucks' decision to end its distribution partnership with Kraft KFT and bring its packaged good business in house was a prudent move that will ultimately drive revenue and margins higher in later years. We are confident that long-term CPG operating margins will return to the high 30s over time, especially as the company builds its distribution capabilities in high-growth markets like China, India, and Brazil. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Thu Dec 02, 2010 11:30 am Post subject: |
|
|
Morningstar review/revising its "conservative fair value" in light of SBUX's analyst day presentations:
| Quote: | | Starbucks' SBUX analyst day reinforced many of our thoughts about the firm's impressive transformation over the past two years, as store closures, in-store efficiencies, supply-chain improvement, and technology investments have helped operating margins rebound to record levels. More important, we left the event with more conviction in Starbucks' ability to evolve from a predominantly retail business into a well-diversified consumer packaged goods--or CPG--and retail platform. We agree with management that Starbucks is uniquely positioned among food-service operators to execute such a transformation, given the success of new product innovations (Via single-serve coffee, in particular) and its ability to connect with grocery and mass-channel customers through its li censed on-premise stores. Most of the firm's long-term financial objectives--top-line growth of 10%, comparable sales growth of 3%-7%, mid-to high teen operating margins, and return on invested capital greater than 20%--are moderately ahead of our current forecasts. We are putting the stock under review as we reassess key growth opportunities outlined at the analyst day, including CPG, international markets, and potential brand acquisitions. If management can achieve its stated targets, the company would be on track to achieve results in line with assumptions in our optimistic scenario, suggesting that our previous fair value estimate may be too conservative. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Fri Nov 05, 2010 10:11 am Post subject: |
|
|
Morningstar on SBUX's 4Q earnings:
| Quote: | | Starbucks' SBUX stellar fourth-quarter results further validated the great strides the company has taken to transform its business model and greatly reduce its cost structure. Comparable-store sales improved 8% during the quarter (6% increase in traffic, 2% gain in the average ticket size), a slight dip from the 9% gain posted in the third-quarter but a 3% acceleration on a two-year stacked basis. Top-line contribution was widespread, including a refined pricing infrastructure that raised prices on more complex drinks, new products (expanded VIA instant coffee assortment, customizable Frappuccino platform), continued loyalty program enrollment, and in-store remodels and enhancements. Starbucks' top-line momentum, coupled with aggressive cost-cutting measures over the past two years, resulted in a 13.3% operating margin, the highest full-year operating margin in the firm's 40-year history. We are leaving our fair value estimate unchanged, but will continue to monitor the progress the company has made in rolling out in-store efficiency practices overseas, as well as growth trajectories for VIA and Seattle's Best Coffee. If these initiatives continue at their current pace, Starbucks would be tracking closer to the assumptions used under our more optimistic discounted cash flow scenario analyses. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Oct 23, 2010 6:21 am Post subject: |
|
|
Platform is open....and wsj.com is free!
http://www.economist.com/blogs/babbage/2010/10/coffee_and_wi-fi
| Quote: | | Several American publishers will provides access to excerpts and the full text of books as part of the Bookish Reading Club. Starbucks gets a piece of subscription signups and sales. All these offers seem designed to fill the store with happy, stationary readers, much like Barnes & Noble did before it lost all of its comfy seating. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Thu Jul 22, 2010 1:49 pm Post subject: |
|
|
Their new free wifi promises the introduction of the internet platform that got shot down way back when.
The frappuccino (that'll trigger your spell-checker 'cause it doesn't exist--great, great marketing) freebee week and customized menu ahead of summer was genius. Just like the lollipop man in "Chitty Chitty Bang Bang."
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
