SBUX - Embedded Expectations Analysis - 2019 09 27
Starbucks Corporation (SBUX:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 33.7x UAFRS-based P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about their international licensing, wages, and sales growth.Specifically, management may lack confidence in their ability to leverage technology to address customer trends, and they may be concerned about their global licensing strategy. Furthermore, they may lack confidence in their ability to monitor metrics to improve customer satisfaction, and they may be concerned about further wage growth impacting profitability. Moreover, they may lack confidence in their ability to sustain recent sales growth in China, and they appear concerned about ongoing revenue headwinds related to the Global Coffee Alliance. Finally, they may be concerned about their delivery partnership with Alibaba and the value of their rewards program to consumers.
Starbucks is a roaster, marketer and retailer of coffee. The company's segments are: Americas, which is inclusive of the United States, Canada, and Latin America; International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, and Africa; and Channel Development. The company's Americas and International segments include both company-operated and licensed stores. The company's Channel Development segment includes roasted whole bean and ground coffees, Seattle's Best Coffee?, Starbucks- and Teavana-branded single-serve products, a variety of ready-to-drink beverages, and other products sold worldwide outside of the company's company-operated and licensed stores.
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