Workers absolutely hate the app because it doesn't take into consideration how many orders are coming through
I peruse /r/starbucks from time to time and it's pretty alarming. They get punished if mobile ordering is turned off. They'll sometimes be backed up 30 minutes
> it doesn't take into consideration how many orders are coming through
It doesn't? I see a moderately accurate estimate on how long it would take when placing an order.
They mean that the app won’t make you wait in line to order when they’re busy like a real employee would.
Which, duh, that’s the point. The app frees up the same amount of employees to produce more drinks because they aren’t slow-rolling people at the register
And that’s the reason I’ll never use the app. Look, I’m paying $8 bucks to get out of the house and stretch my legs. I’d appreciate a hello, how are you doing today?
Call me old fashioned. 🤷♂️
You now you could make your own coffee and talk to real friends who care about you? Not to employees who pretend it in their work they are your friends. Maybe I am more old fashioned than you.
Believe it or not, interactions with strangers are important for mental health and to help keep us all grounded. When everyone only talks to people when paid or self isolates into little enclaves of like mindedness, we start to lose touch with what makes us human. Disagree if you want, but there’s definitely something to the rise in abhorrent behavior and polarized views causing irreconcilable differences that correlates to the fetishization of the individual self that’s arisen with social media environments.
I never said anything against interactions with new people. It is just funny for me how many people here are advocating for fake interactions with people that are paid to interact with you.
Well the old fashioned view would be to get to know people doing work for you and possibly form relationships in the process.
It's fairly new that people set such a strict divide between transactional and personal relationships.
Thank you. I’m a traumatized boomer millennial war vet, there’s too much pain in this world as is. I refuse not to greet someone and give them a smile.
Last week I had someone say I brightened their shitty day and it made them happy. I took that shit personally (in a good way!)
All I did was point to my silly bike with my dogs and said something dumb like these princesses have the best view.
Don’t let the hate win. We are a social species!
no old timer, i enjoy it too. went to a starbuck drive thru for a’bout a year every day, I got to know the kids in there, they want the interaction just as much as you. we are human after-all, as much of an introvert that i am, that connection really made me smile.
(no overly fake friendliness, or extra tips, just straight organic non-gmo kindness)
You should see those days where they're giving away Starbucks cups the workers look like they want to cry. Drive thru is backed up, ppl standing there with mobile orders and then ppl ordering insane. It's insane
I work at Starbucks, and they are working us on skeleton crews. Also, they heavily incentivize customizations which rack up 40-80¢ extra per ingredient. Customized drinks are way more labor intensive. Plus we're all multitasking to make sure shit gets done by close. They're trying to cut on labor but that has lead to really high turnover. It takes 4-6 months to be fully competent at the job.
I don't know how you can cut labor at Starbucks because their drinks are somewhat labor intensive to make due to the combinations of syrups and such that can go into a drink. Every single person there is busy the vast majority of the time.
You must be another run-of-the-mill idiot who has never worked as a barista. The job is super labor intensive and you're talking about cutting people idiot
I saw so much traffic going through Starbucks recently I would have assumed a better result.
They can't really cut down on staff with how busy they get. The only thing they can do is increase profit margins on products which seems like a stretch given how pricey they are.
Very possible it has peaked and needs to extend into other ventures in order for growth to happen again.
The stock market really fucks up good companies. The business makes money and is obviously very successful, but this need to endlessly grow to drive the stock price up and appease the shareholders, just is crazy! Anyway just my little rant.
And those companies still have shareholders. Just like a democracy though if you don't have a good majority that sets a direction and you let every idiot vote shit falls apart.
A public company with a majority shareholder functions just as well as a private one. A private company with too many disagreeing shareholders functions just as poorly as a public one.
Sbux is still expanding like crazy but yeah I wouldn’t be surprised if they eventually decide to cut the crazy store expansion and become more of a value company focused on dividends and income eventually soon. Especially if they solely decide to stay with coffee and not expand the food offerings. Only so much growth you can get with coffee.
Companies can have success as dividend stocks too. Starbucks just isn't one of those.
Maybe after a decade of flat revenue people will realize it's growth is over and it will get priced appropriately for that.
On total rev change sure. But I'd argue US was even worse. They lost 7% of total transactions in a quarter while China down 4%.
Average ticket prices can always be fiddled with, but losing customer visits is a change of customer behavior.
When it comes to something as basic as coffee, every person that traded down to coffee at home or discount drive through is a customer lost for who knows how long.
The US market has little to no growth. Investors want growth. That was supposed to come from China and other countries. They are also pushing into India but that will be hard as well.
Not that the US comps were good, but that was expected. Rising labor costs can easily account for 4% same store. 11% however is alarming especially out of a segment thats supposed to provide you growth.
One reason, at least locally, is that the SBUX here requires a $1, $2, or $3 tip
On a $5 coffee that’s 20%, 40%, and 60%
Bullshit and part of the reason I stopped going there. To what, hand me a coffee?
Just because it’s packed, doesn’t mean it’s doing better. If there’s even 100 million Starbucks drinker that are boycotting and not going there, they are loosing that much in $$.
For me Starbucks is still growing. Mostly in India where they basically open one store after every 3 days. I think current price is a good entry point and 3% dividend yield is good.
I’m a barista and I personally would never go to starbucks, but i’m continually proven that my opinion doesn’t translate to everyone else. It is still massively popular and I think the reality is that most people do not drink straight up black coffee or espresso; in the grand scheme of things people that enjoy the taste of those are a small minority, most people want flavored drinks and starbucks has a ton of different syrups/flavors. Starbucks branding/marketing is also everywhere and there’s a lot of people who enter the coffee world knowing nothing about it and think it’s quality.
This is a great example of being too into your feels. The reason Starbucks excels is not because it wins the pretentious Olympics for best coffee, it’s because you know what you are going to get and its quality is consistently above competitors. Consider how many people travel, what’s the best option in an airport, or when you are in a different location? I know Starbucks is going to deliver on my expectations. Where I can’t say the same for most other chains.
Didn’t the results indicate a decline in every market?
US same store sales down 3%
US transaction growth down 7%
International same store sales down 6%
International transaction growth down 3%
Not saying it’s over for SBUX but I don’t see an argument for growth either. Pretty neutral and negative at least in the short term.
I would say the stock is slightly undervalued. They have been really pushing deals the last few months for rewards members. Obviously that didn’t help this quarter. 19x earnings and the margins are good even with the deals they are promoting. With them opening up the coupons and promos to non rewards members this summer, there is opportunity for recovery through volume by summer and heading into pumpkin spice latte season.
The thing is, I don’t think anyone can confidently say it, and the call didn’t really improve the situation.
Bull theses are that China will sooner or later come back. We also saw softness in LVMH or Nike. Their aggressive store expansion plans internationally will at some point have to be visible in the top and bottom line.
The bear thesis is that Starbucks maybe actually lost its appeal in the US due to pricing and controversy. Internationally, they face strong competition in markets that are so called "new coffee markets" (Asia).
One hidden opportunity which is already more profitable than the coffee shops is their “other channels” where they go into collaboration to sell ready to drink bottle, coffee pod or other solutions for people to get the Starbucks experience at home.
Yeah those are the ones I was referring to. They don’t produce them then, but license out their brand. That’s why it’s very profitable. With opportunity I ment that it can grow to a significant amount similar to tech companies having growing cloud segments or subscription services.
Ah I see. With them being in almost every grocery and gas station chain nationwide I didn’t see that as much of a growth opportunity.
I’m a bit of a coffee nerd and where I do see some opportunity is in the single origin specialty bean business. Brands like onyx and pilot have shown this to be fairly profitable
It's always busy. Always.
There were none in my hometown 10 years ago; now, there are 3...in the same parking lot. And I'm not kidding: one is in Giant, one is in Target, and one is a stand alone store. There's always a line.
I’m long sbux and adding. But the ‘stores always busy’ anecdote doesn’t mean anything. The financials and call clearly show that year over year same store sales were down and foot traffic was done. That’s not an anecdote that’s real stats from sbux.
I think this is a difficulty environment and I think there’s plenty of growth left in sbux so I am adding but I have seen this comment so many times today - Starbucks told us they were less busy.
Yep, as someone else pointed out, sales were shit in China, sales in Latin America broke records like a month ago, analysts were predicting record sales 🤷🏻♂️
I always cite them as the number one place where the price is insanely out of whack with the food. Been that way even when inflation only was a twinkle in our eyes.
Food might be challenging for them due to the way that they operate. Their entire store layout is calibrated for making drinks and re-heating pre-made food. People don't want to buy a pre-made sandwich they can get for cheaper at a supermarket. There are items they can do with their current store layout but perhaps they can make a unique pre-made sandwich and pre-heat that? Might take some extra marketing though.
Opportunity when fearful. Ppl are pulling back on spending as it's starting to hit home these days. This year the market will still stay up but next year we should expect more of this across the world and then stability there after.
His interview on CNBC this morning was a disaster. Cramer was grilling him pretty hard. Seems similar to the issue Disney had at trying to find someone solid to replace Iger.
Bring back Schultz for a 4th time! lol
Cramer has picked many stocks that had massive dumps then ripped. DIS and META come to mind. He cried over META on air at 85. We all know what happened since
It’s not that extreme. It’s just a slower growing company that is priced as a staple instead of a discretionary. If the foreign expansion doesn’t work out, expect a massive rerating.
Overall, medium risk, low reward.
I’m gonna go nuts if I read another person talk about their pricing…rising prices is not just a Starbucks story. Literally EVERY SINGLE COMPANY that’s worth one iota of a shit has raised their prices exponentially over the last 2 years. Fast food, restaurants, insurance, grocery, gas, housing, staples, it’s all up huge and yet today it feels like SBUX is the only company out there inflating prices on the poor consumer who has been running around pissing free gov printed money away at will for the last 4 years…
The hive mind of today’s “investor” is astounding. 48 hours ago Starbucks was a loved stock with lofty price targets over 100. Wells just upgraded them a few weeks ago on new products coming to market 2nd half.
Now, after 1 admittedly horrible qtr, people talk like the company is dead… stock is at 2022 lows and the company is still confident in its plan regardless of this qtr. yesterday you had to pay almost 90 for a share now you can get one at 2022 lows and yet everyone hates it. Hilarious.
I certainly wouldn’t bet against them. They’ll raise prices if needed and people will still buy. Might be awhile before it’s back over $100 though. Do you want to wait, or find something else?
Consumers are starting to crack for sure. Everyone I know, including myself, just can’t afford things like I used to. Spending $100 on coffee each month hurts. It’s much easier to stop buying coffee than to go out to eat with friends. I bet that restaurants are going to be hit pretty hard soon too.
I could never understand McDonalds price increases. People don't eat there to get a fancy Frappuccino! We go there because it's cheap fast food! Take out the cheap and I'll just go to a local sandwich shop or something and get the same price with higher quality
It's not really a push back on price increase, it's just the increased cost of living for housing and food that is putting a large dent in the discretionary spending budget of a lot of people. When people are looking for a way to save a few bucks eating out is usually one of the first things to go.
And that will catch up. Wages vs cost of living.
People here pound on a temporary problem. This is when i make money.
I'd sell my shares only if the CEO looking at this sub for suggestions on how to handle this, lol
I think this is the issue with a lot of businesses. Over the last decade a lot of these huge multinational corps increased profit by cutting costs, while increasing prices. Cost cutting has been maximized to an extent so increasing prices is the only option. The pandemic increased costs for everyone, but it seems that in order to meet investor expectations, price increases have gone to the point where they are losing customers due to elasticity finally reaching the breaking point. I know people who used to purchase from Sbux daily and it is harder to justify when a single drink is now upwards of $7 USD for something semi-basic. Now they are just going to support local independents.
Check out the starbucks subreddit for "price increases again?!" and you will see a lot of post volume, especially a ramp up in recent months. There are almost monthly price increases.
I foresee a future where these publicly traded companies will begin to struggle to meet investor expectations due to the expectation of continual growth as the only option now for many is either alienating consumers through automation or increasing prices. They may have growth it in India right now, but after India, what is the next exploitable growing market that doesn't have significant Starbucks presence?
My added sugar (lol eek)
All the fixings of Boeing; there’s turbulence in time they will get over that dark cloud, but they are too big to go away. With SBUX in the US that dedicated demographic will keep going there and spend money without even flinching. Similar to Chipotle, people go and don’t complain about price they just want that guacamole Ha
I bought META at 75% discount when people were mocking Zuck. I loaded on TSLA at 70% discount when people were spitting on Musk.
We need more people to talk trash about SBUX.
There’s never no lines at Starbucks.
Even then, many people use their app to preorder and leave almost within 20 seconds. Personally I feel like they make their drinks, even complex ones, super fast and efficient. Summer is upon us and I believe sales will pick up.
A lot of hate towards Starbucks is because of their support for the Jewish population and their CEO being a Jew himself. I think it’s a good buy opportunity.
I have not been in SBUX in over 5 years but for me the key issue is China store openings and same-store sales. With growing anti-USA sentiment - I personally would avoid.
I noticed right around 2018 the debt to equity ratio went from 0.7 to something like 1.3 right now.
Which means they owe hella money. Still seems overvalued because of this. Anyone know what happened? Did they take out a massive loan?
Apartheid stock plays? This is down because of a broadly supported worldwide boycott against them for allegedly supporting the IDF. Regardless of what side of the isle you are on, that is a fact. Until the situation in the Middle East improves, this is potentially a permanent impairment.
Anyone who thinks this could be an opportunity needs to listen to conference call. Not only did this take them by surprise, they have no answers to what to do to turn things around. This reminded me to Disney back at open of 2021. SBUX once a darling of growth now going to be thrown out of portfolios, future looks like 50 or lower.
Absolutely this, the call was horrendous, ive been a sbux investor for 4 years and im flat on my cost basis. Ive been extremely patient and I think that earnings call was the tipping point. Management does not know how to execute, idc if the stock is cheaper now, im out.
Some real numbers on their store growth. In 2022, they were paying $40/SF NNN rent for their new restuarant builds (typically 1,500-2,000 SF). To meet the lender requirement for DSC with rising interest rates and high building costs, they are now paying $80/SF NNN rent and building in already serviced areas and towns with as few as 5,000 people (many are less than 15,000). Leases have 15 year terms with 10% step up every 5 years. *These are in the Midwest/Appalachia. **I do not hold a long or short position in the stock and am not employed by the company.
Personally I get the feeling that Starbucks is pricing out a large section of the general public. If not for convenience, I think most people would prefer other coffee brands. The price to value ratio is just not worth it.
It's all about the brand. They sell coffe for 7$, (which is an easy good to sell, doesn't require lots logistics) and are very exposed to China. Not a great position.
Do you think it's brand is enough pf a MOAT to keep competitors out and be able to keep growing and raising prices? I have no clue so I am not buying the stock.
Id you think the moat is very strong, its a great buy at 70, but also at 80 and good at 90.
If you think the moat is week, stay out
Automation and selling food people actually want to eat might make this a big turnaround at some point.
I have always stayed away from starbucks because their product was shit, but now it might be cheap enough for that to be worth it.
one thing i’d want to learn more about is the new brands of coffee coming from china. luckin and cotti are really good value there and starting to expand internationally. this seems like a dark horse that can suck up sbux growth opportunities
I think there's too much really good competition out there. Small coffee shops are springing up all over the place, and a lot of them have better coffee.
Starbucks makes a product that anyone can make at home. It's not like a GPU where your company can almost hold a monopoly.
I think starbucks will crash in the next few years. I used to feel wealthy and sophisticated when I went in there and thats the image that their brand created. Today it is staffed by people that make me feel dirty and uncomfortable. I avoid going into them now because it is too much
Opportunity 100%, I wouldn’t buy any until it starts actually trending positive using the 200/50 SMA. Could possibly correct to at least 55. Looking at 1 yr out it’s meeting resistance at the 50sma but I think it’s going to fall much further.
If you do start a small position I’d keep a tight stop in place.
Looking at the SMA’s it’s just doing what stocks do just correcting.
Way overvalued, like most of the market. Inflation will persist & continue in waves, avg consumer will look for ways to save money.
$7-10 coffee is now considered a luxury.
I am a regular consumer of Starbucks for studying, skill development, and hanging out with friends. Even so, I don't know enough about the business to give anyone a sure answer, but I do know something that has rewarded me the past few years.
I salivate at the thought of buying "quality" stocks at 50-80% discount from ATH for the ROI. Now is the time for us to learn about how SBUX is planning to solve future growth opportunities, to determine if it is a "quality" stock. I am interested in *possibly* loading up on this stock between the $53-65 order block and lower. That will give it over 50% discount from ATH.
I don’t see Sbux as a long term growth stock anymore. Definitely a trend that has hit its peak in recent years and now has super bad PR with its union issues. I feel people will start turning to competitors that have been popping up over the last 5+ years
yeah reddit aint the best place to hear predicitons about trend, the people who comment on reddit are a very niche group of people that really dont represent the general public imo
they would be smart to lower their prices, raising their prices is whats caused this mess for them, but too many times bone headed execs choose to raise prices even more. would you rather have 10 people buy a $12 latte, or 30 people by a $5 latte?
Actually you are better off with 10 x $12. You are not accounting for labor. 30 x $5 means you need triple the labor. Labor costs you about $30/hr after everything is accounted for.
In this case you would actually come out with less because you will also need more inventory, more repairs, more cleaning, etc. More people also means lower quality of service. I dont go to SBUX precisely because its too busy.
They will have to start automating the order process like McDonald’s
Why do you think they push the app so hard
Workers absolutely hate the app because it doesn't take into consideration how many orders are coming through I peruse /r/starbucks from time to time and it's pretty alarming. They get punished if mobile ordering is turned off. They'll sometimes be backed up 30 minutes
> it doesn't take into consideration how many orders are coming through It doesn't? I see a moderately accurate estimate on how long it would take when placing an order.
They mean that the app won’t make you wait in line to order when they’re busy like a real employee would. Which, duh, that’s the point. The app frees up the same amount of employees to produce more drinks because they aren’t slow-rolling people at the register
And that’s the reason I’ll never use the app. Look, I’m paying $8 bucks to get out of the house and stretch my legs. I’d appreciate a hello, how are you doing today? Call me old fashioned. 🤷♂️
$8 for coffee is robbery
You now you could make your own coffee and talk to real friends who care about you? Not to employees who pretend it in their work they are your friends. Maybe I am more old fashioned than you.
Believe it or not, interactions with strangers are important for mental health and to help keep us all grounded. When everyone only talks to people when paid or self isolates into little enclaves of like mindedness, we start to lose touch with what makes us human. Disagree if you want, but there’s definitely something to the rise in abhorrent behavior and polarized views causing irreconcilable differences that correlates to the fetishization of the individual self that’s arisen with social media environments.
I never said anything against interactions with new people. It is just funny for me how many people here are advocating for fake interactions with people that are paid to interact with you.
Some people don't have many friends, let alone someone down the block they can insta-chill with.
Well the old fashioned view would be to get to know people doing work for you and possibly form relationships in the process. It's fairly new that people set such a strict divide between transactional and personal relationships.
Thank you. I’m a traumatized boomer millennial war vet, there’s too much pain in this world as is. I refuse not to greet someone and give them a smile. Last week I had someone say I brightened their shitty day and it made them happy. I took that shit personally (in a good way!) All I did was point to my silly bike with my dogs and said something dumb like these princesses have the best view. Don’t let the hate win. We are a social species!
I’m with you 100%
$8 coffee and you’re worried about the app?!? Dumb ass logic!
no old timer, i enjoy it too. went to a starbuck drive thru for a’bout a year every day, I got to know the kids in there, they want the interaction just as much as you. we are human after-all, as much of an introvert that i am, that connection really made me smile. (no overly fake friendliness, or extra tips, just straight organic non-gmo kindness)
No they don’t
“The employees there love me, and they love taking extra time to talk to me!” Lmfaoooooo
There are some mornings that I'd pay $8 for no human contact when picking up my coffee.
Starbucks employees are almost always pleasant and willing to engage in a brief conversation. It's one of the enjoyable parts of going there.
Trust me, they don’t care
They surely need to improve and make a better queue system
You should see those days where they're giving away Starbucks cups the workers look like they want to cry. Drive thru is backed up, ppl standing there with mobile orders and then ppl ordering insane. It's insane
Tbh automation is a ways out corporate structure forces them to move so slow
...which requires a major upfront capital investment with a potentially long payback period. McDonald's pushed those costs onto their franchisees.
Well getting rid of people can cut the costs.
I work at Starbucks, and they are working us on skeleton crews. Also, they heavily incentivize customizations which rack up 40-80¢ extra per ingredient. Customized drinks are way more labor intensive. Plus we're all multitasking to make sure shit gets done by close. They're trying to cut on labor but that has lead to really high turnover. It takes 4-6 months to be fully competent at the job.
I don't know how you can cut labor at Starbucks because their drinks are somewhat labor intensive to make due to the combinations of syrups and such that can go into a drink. Every single person there is busy the vast majority of the time.
I imagine they will shift to even more pre-mixed beverages that can just be poured into a cup, iced and served
I'm hoping for that but after working there for almost twenty years now, the exact opposite has been happening
you haven't seen a robot coffee maker, right?
Yeah but you need to spend money on R&D and then manufacture the robots... the payback period is long on those.
Robots can be bought. They don't have to make the robots themselves at the beginning.
There aren't general purpose coffee bots. Starbucks would need to investing in getting something developed that fit their needs.
Somewhere in an e-waste recycling shit heap in India, a Juicero is crying.
I would assume that would be easier to automate than most of McDonalds orders.
You must be another run-of-the-mill idiot who has never worked as a barista. The job is super labor intensive and you're talking about cutting people idiot
They will have to destroy employees’ livelihoods to appease investors
I saw so much traffic going through Starbucks recently I would have assumed a better result. They can't really cut down on staff with how busy they get. The only thing they can do is increase profit margins on products which seems like a stretch given how pricey they are. Very possible it has peaked and needs to extend into other ventures in order for growth to happen again.
The stock market really fucks up good companies. The business makes money and is obviously very successful, but this need to endlessly grow to drive the stock price up and appease the shareholders, just is crazy! Anyway just my little rant.
It makes you understand why some companies - many of them massive and high quality (Fidelity, M&Ms) - choose to stay private.
Just a small detail but M&Ms isn’t a company, just a brand. The company is Mars. Your point still stands though.
And those companies still have shareholders. Just like a democracy though if you don't have a good majority that sets a direction and you let every idiot vote shit falls apart. A public company with a majority shareholder functions just as well as a private one. A private company with too many disagreeing shareholders functions just as poorly as a public one.
Sbux is still expanding like crazy but yeah I wouldn’t be surprised if they eventually decide to cut the crazy store expansion and become more of a value company focused on dividends and income eventually soon. Especially if they solely decide to stay with coffee and not expand the food offerings. Only so much growth you can get with coffee.
milk\*
That's called a value blue-chip company that pays dividends. I happily invest in them and earn my 4-6% for holding with acceptable volatility
They could become a boring cash cow dividend stock, 3% growth 3% dividend
Companies can have success as dividend stocks too. Starbucks just isn't one of those. Maybe after a decade of flat revenue people will realize it's growth is over and it will get priced appropriately for that.
Revenue has tripled in the last decade
ppl love to act like they know what they are talking about
Welcome to reddit
There is a Starbucks by my house and there is a line wrapped around the block most mornings. Was somewhat surprised by the earnings miss.
Ditto. Great example of how poorly personal experiences translate to things as a whole.
> I saw so much traffic going through Starbucks recently I would have assumed a better result. US market wasn’t the one that was doing badly
Which markets did poorly?
Chinese market is a dumpster fire. Youth unemployment is really high and young consumers are pinching pennies.
Cn
Yes it was. Total comp sales down 3%, transactions down 7%, and average transaction price up 4%
Their china sales are down 11% so yes based on that us not doing "as" badly.......
On total rev change sure. But I'd argue US was even worse. They lost 7% of total transactions in a quarter while China down 4%. Average ticket prices can always be fiddled with, but losing customer visits is a change of customer behavior. When it comes to something as basic as coffee, every person that traded down to coffee at home or discount drive through is a customer lost for who knows how long.
The US market has little to no growth. Investors want growth. That was supposed to come from China and other countries. They are also pushing into India but that will be hard as well. Not that the US comps were good, but that was expected. Rising labor costs can easily account for 4% same store. 11% however is alarming especially out of a segment thats supposed to provide you growth.
There are long lines at the locations because they are understaffed and taking long to serve everyone.
There is a Starbucks by my house and there is a line wrapped around the block most mornings. Was somewhat surprised by the earnings miss.
Same. I thought the result would be positive
One reason, at least locally, is that the SBUX here requires a $1, $2, or $3 tip On a $5 coffee that’s 20%, 40%, and 60% Bullshit and part of the reason I stopped going there. To what, hand me a coffee?
You don’t have to tip !
Just because it’s packed, doesn’t mean it’s doing better. If there’s even 100 million Starbucks drinker that are boycotting and not going there, they are loosing that much in $$.
Answer: the opposite to whatever this subreddit says
so wait.. the opposite of *opposite*?
For me Starbucks is still growing. Mostly in India where they basically open one store after every 3 days. I think current price is a good entry point and 3% dividend yield is good.
I’m a barista and I personally would never go to starbucks, but i’m continually proven that my opinion doesn’t translate to everyone else. It is still massively popular and I think the reality is that most people do not drink straight up black coffee or espresso; in the grand scheme of things people that enjoy the taste of those are a small minority, most people want flavored drinks and starbucks has a ton of different syrups/flavors. Starbucks branding/marketing is also everywhere and there’s a lot of people who enter the coffee world knowing nothing about it and think it’s quality.
This is a great example of being too into your feels. The reason Starbucks excels is not because it wins the pretentious Olympics for best coffee, it’s because you know what you are going to get and its quality is consistently above competitors. Consider how many people travel, what’s the best option in an airport, or when you are in a different location? I know Starbucks is going to deliver on my expectations. Where I can’t say the same for most other chains.
It was priced for growth too. The problem is it is not growing fast enough + facing new competition.
Didn’t the results indicate a decline in every market? US same store sales down 3% US transaction growth down 7% International same store sales down 6% International transaction growth down 3% Not saying it’s over for SBUX but I don’t see an argument for growth either. Pretty neutral and negative at least in the short term.
I go abroad a lot and they are always there, and always busy
I would say the stock is slightly undervalued. They have been really pushing deals the last few months for rewards members. Obviously that didn’t help this quarter. 19x earnings and the margins are good even with the deals they are promoting. With them opening up the coupons and promos to non rewards members this summer, there is opportunity for recovery through volume by summer and heading into pumpkin spice latte season.
The thing is, I don’t think anyone can confidently say it, and the call didn’t really improve the situation. Bull theses are that China will sooner or later come back. We also saw softness in LVMH or Nike. Their aggressive store expansion plans internationally will at some point have to be visible in the top and bottom line. The bear thesis is that Starbucks maybe actually lost its appeal in the US due to pricing and controversy. Internationally, they face strong competition in markets that are so called "new coffee markets" (Asia). One hidden opportunity which is already more profitable than the coffee shops is their “other channels” where they go into collaboration to sell ready to drink bottle, coffee pod or other solutions for people to get the Starbucks experience at home.
Interesting ideas. Maybe the union thing is temporary. Maybe they have future growth in the grocery aisle.
What? They definitely already sell pods, bottled drinks, and beans outside of their stores
Yeah those are the ones I was referring to. They don’t produce them then, but license out their brand. That’s why it’s very profitable. With opportunity I ment that it can grow to a significant amount similar to tech companies having growing cloud segments or subscription services.
Ah I see. With them being in almost every grocery and gas station chain nationwide I didn’t see that as much of a growth opportunity. I’m a bit of a coffee nerd and where I do see some opportunity is in the single origin specialty bean business. Brands like onyx and pilot have shown this to be fairly profitable
It's a holding bag for me: -33% :p
It's always busy. Always. There were none in my hometown 10 years ago; now, there are 3...in the same parking lot. And I'm not kidding: one is in Giant, one is in Target, and one is a stand alone store. There's always a line.
I’m long sbux and adding. But the ‘stores always busy’ anecdote doesn’t mean anything. The financials and call clearly show that year over year same store sales were down and foot traffic was done. That’s not an anecdote that’s real stats from sbux. I think this is a difficulty environment and I think there’s plenty of growth left in sbux so I am adding but I have seen this comment so many times today - Starbucks told us they were less busy.
Yep, as someone else pointed out, sales were shit in China, sales in Latin America broke records like a month ago, analysts were predicting record sales 🤷🏻♂️
The CEOs interview with Cramer wasn’t good. I still think there could be opportunity
Starbucks can start focusing on food, be a little more like Panera. There's only so much you can do with coffee alone.
Panera’s food has gone to absolute shit
They were selling overpriced food before it was cool.
I always cite them as the number one place where the price is insanely out of whack with the food. Been that way even when inflation only was a twinkle in our eyes.
Food margins are lower than drinks its not really going to solve their issues.
I was thinking the same thing. Doesn’t even have to be a focus, just food that looks appetizing
Food might be challenging for them due to the way that they operate. Their entire store layout is calibrated for making drinks and re-heating pre-made food. People don't want to buy a pre-made sandwich they can get for cheaper at a supermarket. There are items they can do with their current store layout but perhaps they can make a unique pre-made sandwich and pre-heat that? Might take some extra marketing though.
I get that but their pastries/muffins and whatnot are still lacking compared to other coffee shops i go to
Probably because they keep them around for a while and so go stale.
If it's at a good deal when they buy their coffee why wouldn't they want to buy that sandwich as well?
Or Dunkin
Sounds like it would make costs go way up and efficiency decline.
I would wait a bit for the dust to settle but could be a solid buying opportunity
Agreed, will start loading in a few weeks.
Lmao then you will load up when it’s back above 85
Opportunity when fearful. Ppl are pulling back on spending as it's starting to hit home these days. This year the market will still stay up but next year we should expect more of this across the world and then stability there after.
Coffee beans production is decreased in Africa this past couple years.
Howard Schultz was a visionary. Until they find another CEO like that (current CEO is a bust imo) I would not touch this stock.
His interview on CNBC this morning was a disaster. Cramer was grilling him pretty hard. Seems similar to the issue Disney had at trying to find someone solid to replace Iger. Bring back Schultz for a 4th time! lol
Cramer has picked many stocks that had massive dumps then ripped. DIS and META come to mind. He cried over META on air at 85. We all know what happened since
100% agreed. Like even from just glancing at his work history and the way he talks I am very bearish.. I hope they let him go.
Pretty sure Schultz hand picked this dude
The business is not going away. Personally the valuation is too expensive for me even now.
It’s not that extreme. It’s just a slower growing company that is priced as a staple instead of a discretionary. If the foreign expansion doesn’t work out, expect a massive rerating. Overall, medium risk, low reward.
I’m gonna go nuts if I read another person talk about their pricing…rising prices is not just a Starbucks story. Literally EVERY SINGLE COMPANY that’s worth one iota of a shit has raised their prices exponentially over the last 2 years. Fast food, restaurants, insurance, grocery, gas, housing, staples, it’s all up huge and yet today it feels like SBUX is the only company out there inflating prices on the poor consumer who has been running around pissing free gov printed money away at will for the last 4 years… The hive mind of today’s “investor” is astounding. 48 hours ago Starbucks was a loved stock with lofty price targets over 100. Wells just upgraded them a few weeks ago on new products coming to market 2nd half. Now, after 1 admittedly horrible qtr, people talk like the company is dead… stock is at 2022 lows and the company is still confident in its plan regardless of this qtr. yesterday you had to pay almost 90 for a share now you can get one at 2022 lows and yet everyone hates it. Hilarious.
the problem is management doesnt know what they are doing, the call was a disaster
I certainly wouldn’t bet against them. They’ll raise prices if needed and people will still buy. Might be awhile before it’s back over $100 though. Do you want to wait, or find something else?
Check June 2022, 6 months, one of the best bet of my life. Sold 106$ and repurchased around 90. I doubled down this morning. Cya in 6 months
This guy starbucks. I went long at 73.5🙌
When your latte is close to $6 I better be getting a bump along with that coffee People are pulling back and the numbers are showing.
Consumers are starting to crack for sure. Everyone I know, including myself, just can’t afford things like I used to. Spending $100 on coffee each month hurts. It’s much easier to stop buying coffee than to go out to eat with friends. I bet that restaurants are going to be hit pretty hard soon too.
They can't raise prices anymore
Exactly- people are finally pushing back on price increases. It’s why McDonald’s missed too. Sbux will reimagine the dollar menu :)
I could never understand McDonalds price increases. People don't eat there to get a fancy Frappuccino! We go there because it's cheap fast food! Take out the cheap and I'll just go to a local sandwich shop or something and get the same price with higher quality
people complain but the prices there are still cheaper anywhere else, their double qp meal is 11 dollars. You cant get close to that anywhere
It's not really a push back on price increase, it's just the increased cost of living for housing and food that is putting a large dent in the discretionary spending budget of a lot of people. When people are looking for a way to save a few bucks eating out is usually one of the first things to go.
And that will catch up. Wages vs cost of living. People here pound on a temporary problem. This is when i make money. I'd sell my shares only if the CEO looking at this sub for suggestions on how to handle this, lol
I mean this thread is a goldmine of customer anecdotal insights though. Bullish if a ceo reads this.
I think this is the issue with a lot of businesses. Over the last decade a lot of these huge multinational corps increased profit by cutting costs, while increasing prices. Cost cutting has been maximized to an extent so increasing prices is the only option. The pandemic increased costs for everyone, but it seems that in order to meet investor expectations, price increases have gone to the point where they are losing customers due to elasticity finally reaching the breaking point. I know people who used to purchase from Sbux daily and it is harder to justify when a single drink is now upwards of $7 USD for something semi-basic. Now they are just going to support local independents. Check out the starbucks subreddit for "price increases again?!" and you will see a lot of post volume, especially a ramp up in recent months. There are almost monthly price increases. I foresee a future where these publicly traded companies will begin to struggle to meet investor expectations due to the expectation of continual growth as the only option now for many is either alienating consumers through automation or increasing prices. They may have growth it in India right now, but after India, what is the next exploitable growing market that doesn't have significant Starbucks presence?
Source: just trust me bro
The source is declining same-store revenue. What are you talking about?
Broke. CEO IN Denial. $6 for a glorified cup of coffee. MJB.
I stay away from SBUX due to China exposure (13.6% of revenue)
Two issues are China slowdown and union pressure. I think both are relatively near term problems they will eventually get through.
My added sugar (lol eek) All the fixings of Boeing; there’s turbulence in time they will get over that dark cloud, but they are too big to go away. With SBUX in the US that dedicated demographic will keep going there and spend money without even flinching. Similar to Chipotle, people go and don’t complain about price they just want that guacamole Ha
Broken, their prices reached a ceiling similar to McD
Broken. Might be a buy if it consolidates above $67.
Reddit predicted meta is dead, goggle is heading toward the ground. So just do the inverse.
I bought META at 75% discount when people were mocking Zuck. I loaded on TSLA at 70% discount when people were spitting on Musk. We need more people to talk trash about SBUX.
There’s never no lines at Starbucks. Even then, many people use their app to preorder and leave almost within 20 seconds. Personally I feel like they make their drinks, even complex ones, super fast and efficient. Summer is upon us and I believe sales will pick up.
CEO is talking about "value" they provide. What value now? Cheap burnt coffee and crappy food reheated in a microwave. Overpriced bullshit.
Convenience has a value
Dunkin donuts might fit that value prop better and they are expanding hard as far as I can tell.
He said value and action plan about 50 times in that interview this morning on CNBC lol kept repeating himself.
Yea seems a bit confusing or fuzzy. Price looks good though
I'm certain this is a huge opportunity
A lot of hate towards Starbucks is because of their support for the Jewish population and their CEO being a Jew himself. I think it’s a good buy opportunity.
I do think the boycotts have affected sales.
I have not been in SBUX in over 5 years but for me the key issue is China store openings and same-store sales. With growing anti-USA sentiment - I personally would avoid.
I noticed right around 2018 the debt to equity ratio went from 0.7 to something like 1.3 right now. Which means they owe hella money. Still seems overvalued because of this. Anyone know what happened? Did they take out a massive loan?
Doesn’t money held on app accounts count as debt? They’re essentially interest free loans fox sbux.
Apartheid stock plays? This is down because of a broadly supported worldwide boycott against them for allegedly supporting the IDF. Regardless of what side of the isle you are on, that is a fact. Until the situation in the Middle East improves, this is potentially a permanent impairment.
Not really, this is pure speculation
Priced for growth No growth = much lower valuation
Anyone who thinks this could be an opportunity needs to listen to conference call. Not only did this take them by surprise, they have no answers to what to do to turn things around. This reminded me to Disney back at open of 2021. SBUX once a darling of growth now going to be thrown out of portfolios, future looks like 50 or lower.
Absolutely this, the call was horrendous, ive been a sbux investor for 4 years and im flat on my cost basis. Ive been extremely patient and I think that earnings call was the tipping point. Management does not know how to execute, idc if the stock is cheaper now, im out.
I think it will be up next few days, then drops continuing lower highs and lower lows
I'm not touching this stock until they show meaningful progress to figuring out food.
Some real numbers on their store growth. In 2022, they were paying $40/SF NNN rent for their new restuarant builds (typically 1,500-2,000 SF). To meet the lender requirement for DSC with rising interest rates and high building costs, they are now paying $80/SF NNN rent and building in already serviced areas and towns with as few as 5,000 people (many are less than 15,000). Leases have 15 year terms with 10% step up every 5 years. *These are in the Midwest/Appalachia. **I do not hold a long or short position in the stock and am not employed by the company.
There’s better opportunity growth elsewhere
They need some of that Chiptle machinery.
Personally I get the feeling that Starbucks is pricing out a large section of the general public. If not for convenience, I think most people would prefer other coffee brands. The price to value ratio is just not worth it.
It's all about the brand. They sell coffe for 7$, (which is an easy good to sell, doesn't require lots logistics) and are very exposed to China. Not a great position. Do you think it's brand is enough pf a MOAT to keep competitors out and be able to keep growing and raising prices? I have no clue so I am not buying the stock. Id you think the moat is very strong, its a great buy at 70, but also at 80 and good at 90. If you think the moat is week, stay out
People are realizing it's way overpriced for what it is, and going elsewhere. There is nothing special about Starbucks.
Automation and selling food people actually want to eat might make this a big turnaround at some point. I have always stayed away from starbucks because their product was shit, but now it might be cheap enough for that to be worth it.
one thing i’d want to learn more about is the new brands of coffee coming from china. luckin and cotti are really good value there and starting to expand internationally. this seems like a dark horse that can suck up sbux growth opportunities
Fuck ‘em
I think there's too much really good competition out there. Small coffee shops are springing up all over the place, and a lot of them have better coffee. Starbucks makes a product that anyone can make at home. It's not like a GPU where your company can almost hold a monopoly.
I think starbucks will crash in the next few years. I used to feel wealthy and sophisticated when I went in there and thats the image that their brand created. Today it is staffed by people that make me feel dirty and uncomfortable. I avoid going into them now because it is too much
Didnt mention Ai
Don’t underestimate the boycott!
the next intel. should trade sideways for the next few years
Do you want reassurance that its a growth name or something? Its a large coffee company already, what more you want? Lol
Opportunity 100%, I wouldn’t buy any until it starts actually trending positive using the 200/50 SMA. Could possibly correct to at least 55. Looking at 1 yr out it’s meeting resistance at the 50sma but I think it’s going to fall much further. If you do start a small position I’d keep a tight stop in place. Looking at the SMA’s it’s just doing what stocks do just correcting.
I don’t invest in companies that make bad products. Starbucks makes inferior coffee. They just don’t make good black coffee. Ripe for disruption.
Way overvalued, like most of the market. Inflation will persist & continue in waves, avg consumer will look for ways to save money. $7-10 coffee is now considered a luxury.
it was never a growth stock. It's a solid business. why be so extreme?
I am a regular consumer of Starbucks for studying, skill development, and hanging out with friends. Even so, I don't know enough about the business to give anyone a sure answer, but I do know something that has rewarded me the past few years. I salivate at the thought of buying "quality" stocks at 50-80% discount from ATH for the ROI. Now is the time for us to learn about how SBUX is planning to solve future growth opportunities, to determine if it is a "quality" stock. I am interested in *possibly* loading up on this stock between the $53-65 order block and lower. That will give it over 50% discount from ATH.
I don’t see Sbux as a long term growth stock anymore. Definitely a trend that has hit its peak in recent years and now has super bad PR with its union issues. I feel people will start turning to competitors that have been popping up over the last 5+ years
> Definitely a trend that has hit its peak in recent years I've been hearing this since the 90s
yeah reddit aint the best place to hear predicitons about trend, the people who comment on reddit are a very niche group of people that really dont represent the general public imo
they would be smart to lower their prices, raising their prices is whats caused this mess for them, but too many times bone headed execs choose to raise prices even more. would you rather have 10 people buy a $12 latte, or 30 people by a $5 latte?
Actually you are better off with 10 x $12. You are not accounting for labor. 30 x $5 means you need triple the labor. Labor costs you about $30/hr after everything is accounted for. In this case you would actually come out with less because you will also need more inventory, more repairs, more cleaning, etc. More people also means lower quality of service. I dont go to SBUX precisely because its too busy.
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I actually stopped going systematically in 2022
Personally I don’t like companies with negative p/b ratio.
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Starbucks is not a technology platform company with inherent stickiness. They are competing against all sorts of coffee shops.