SBUX - Embedded Expectations Analysis - 2020 04 08
ï€ Starbucks Corporation (SBUX:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 31.8x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about revenue growth, China stores, and customer engagementï€ Specifically, management may lack confidence in their ability to sustain US revenue and comp sales growth, continue leading consumer perception of specialty coffee retail concepts, and increase their Mobile Order and Pay transaction mix. In addition, they may have concerns about the impact of COVID-19 on near-term traffic results and store closures and sales slowdown at open stores. Moreover, they may lack confidence in their ability to sustain sales growth in China from continued expansion and mobile ordering and improve digital customer engagement. Finally, they may be exaggerating the strength of their brand
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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