SBUX - Embedded Expectations Analysis - 2020 06 05
Starbucks Corporation (SBUX:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 46.5x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about sales growth, the pace and format of US store reopening, and the impact of coronavirusSpecifically, management may lack confidence in their ability to maintain in-store sales growth and net new locations in China, improve their Channel Development segment operating margin, and invest in their partners and business. Furthermore, they may be overstating their stores' ability to adopt safety protocols, their ability to leverage their scale to manage their business for long-term growth, and their balanced focus on bottom-line and top-line growth. They may also have concerns about the pace and format of their US store reopening and their ability to ensure customer safety. Moreover, they may lack confidence in their ability to help licensees navigate the current market environment, recoup pre-coronavirus business momentum, and execute their monitor-and-adapt phase strategy
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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