SBUX - Embedded Expectations Analysis - 2021 03 18
Starbucks Corporation (SBUX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 44.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about maintaining revenue growth, operating margins, and new stores in ChinaSpecifically, management may lack confidence in their ability to sustain comparable same store revenue improvements, maintain record sales performance from their Double 11 campaign, and drive top-line growth in China. In addition, they may lack confidence in their ability to sustain their margin outperformance in both their Americas and International segments, execute their trade area transformation initiatives, and continue the acceleration of new stores in China. Furthermore, they may be overstating the firm's resilience, the sustainability of their wage and benefits increases, and their ability to meet EPS guidance
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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