The Buzz
Starbucks percs up: Stock jumps 4%
January 25, 2013: 11:59 AM ET
Coffee's for closers ... and investors. Starbucks shares have popped thanks to strong sales in the U.S. and around the world.
Starbucks is enjoying a caffeine rush on Friday after the coffee king reported its latest quarterly results.
Shares of Starbucks (SBUX) were up 4% in late morning trading. The company announced Thursday afternoon that fiscal first-quarter sales jumped 11% from a year ago and hit a record of $3.8 billion. Earnings per share were up 14%.
Although these numbers simply met analysts' forecasts, many investors were clearly impressed to see the company continue to grow, particularly in international markets. Starbucks said same-store sales rose 11% in its China/Asia Pacific unit.
But can the stock keep brewing up strong returns? Shares now trade at about 26 times fiscal 2013 earnings estimates, a bit of a premium to rivals McDonald's (MCD) and Dunkin Brands (DNKN) as well as K-Cup "frenemy" (and David Einhorn short target) Green Mountain Coffee Roasters (GMCR). Still, many traders on StockTwits think Starbucks deserves to trade at a lofty price.
retail_guru
Starbucks has run 7%+ quarterly comps in the US for three years running. Pretty incredible - stuff premium multiples are made off $SBUX
DerKomizar
$SBUX CEO Howard Schultz came across very well during the CC...Growth and record earnings driving company.
Great points. The international growth plans of Starbucks get most of the attention. But the company continues to dominate in the United States. And the stock has been on a tear since Schultz came back to lead Starbucks in 2008.
It's an amazing comeback for a company that just a few years ago was being accused of having saturated the market with stores on nearly every corner of most big cities and towns. It brings to mind the hilarious "Best in Show" scene about a husband and wife meeting at Starbucks ... but not the same Starbucks. "We saw each other at different Starbucks across the street from each other."
One of my CNNMoney colleagues wants some credit for Starbucks' success. And another trader points out that Starbucks may have replaced a certain tech company as Wall Street's latest darling "it" stock.
ctymkiw
I'd like to think I contributed to Starbucks' 2% pop this a.m. Sipping a latte as I write. $SBUXup on upbeat CEO comments. #earnings
Catherine, follow the Peter Lynch "buy what you know" mantra. For a mere $52 more than the $5 you probably shelled out for that tasty beverage, you can buy a share of Starbucks stock!
HowardWPenney
$SBUX is the new $AAPL... Consumers are addicted to the product with new innovative form factors and global growth characteristics...
I think that's a compliment. But Starbucks investors have to hope that the stock doesn't plunge 35% in a few months like the once invincible Apple (AAPL) has done. Speaking of Apple, it is interesting that Starbucks avoided a huge sell-off considering that its results did not blow past forecasts. But that's kind of like the whole market right now. Apple can apparently do nothing right and everybody else gets a free pass and the benefit of the doubt.
StockTwits50
All news is good news, unless it is related to Apple. $SBUX up 4% on a so-so quarter.
Finally, it's time for the Reader Comment of the Week. Apple was THE story. Lots of funny tweets about the huge sell-off following earnings. But here was my favorite. It was in response to my joke about how tissue makers Procter & Gamble (PG) and Kimberly-Clark (KMB) might benefit from increased sales to inconsolable Apple shareholders.
@LaMonicaBuzz $AAPL shareholders also buying more beer to cry in when the Kleenex runs out. $TAP $BUD & $SAM all higher today.—
The Mays Report (@MaysReport) January 24, 2013
Ha! But investors may need something a bit stronger than beer. Beam (BEAM), Jack Daniel's-owner Brown-Forman (BFB) and Johnnie Walker parent Diageo (DEO) were all up on Friday.
-
Einhorn: Short Chipotle, go long GM
Hedge fund manager David Einhorn's newest short target: Chipotle Mexican Grill (CMG).
Greenlight Capital's Einhorn thinks Taco Bell, owned by Yum Brands (YUM), will eat Chipotle's lunch with its new Cantina-style menu.
Chipotle was one of four stocks that Einhorn discussed during his presentation at the Value Investing Congress in New York. He also spelled out a case for why investors should buy General Motors (GM) and health insurer Cigna (CI). MORE
Maureen Farrell - Oct 2, 2012 12:56 PM ET -
Green Mountain surges. But why?
Green Mountain Coffee Roasters (GMCR) issued some decaf guidance. But that didn't matter to investors. Shares popped nearly 30% Thursday morning even though the company provided a near-term earnings outlook Wednesday that was less than stellar. It appears investors are excited to hear that the company is boosting its inventory ahead of what it hopes will be strong demand next year.
That's dangerous. Many companies have been burned by boosting inventory MORE
Paul R. La Monica - Aug 2, 2012 10:41 AM ET -
Starbucks cools off
Starbucks is cooling off ... for now.
The Seattle-based coffee chain trimmed its earnings forecast by about 2 cents a share Tuesday, but there's no need to panic. It's not like Starbucks is going to report a loss.
Last year's high coffee prices, Europe's nagging debt problems and the company's baking plans will cut into Starbucks' bottom line this year, said chief financial officer Troy Alstead, at the annual stock conference of MORE
Catherine Tymkiw - Jun 12, 2012 3:39 PM ET -
Best of StockTwits: Not feeling like a million Starbucks
Traders debate whether the Starbucks (SBUX) Bay Bread/La Boulange buy is a half-baked idea. And Netflix (NFLX) decides to show some backbone.
JeffReevesIP: I just don't get the $SBUX bakery move. Yes, some Starbucks coffee drinkers may buy a pastry too. But is that the extent of the "plan?"
JeffReevesIP: Bigger issue: I ADORE coffee but more & more don't - esp younger energy drink crowd. Yes $SBUX must rethink "cafe" menu MORE
Paul R. La Monica - Jun 5, 2012 2:00 PM ET -
Stupid Stock Move of the Day! No Panera sell-off?
#StupidStock Move of the Day! Was tempted to go $SBUX but yesterday's rally equally dumb. Still, $PNRA flat? Shouldn't Panera be nervous?— Paul R. La Monica (@LaMonicaBuzz) June 05, 2012
Starbucks (SBUX) is getting into the bread business. While the $100 million purchase of La Boulange Bakery in San Francisco is a relatively small deal for the king of coffee, I am a little surprised Panera (PNRA) investors aren't more worried MORE
Paul R. La Monica - Jun 5, 2012 1:02 PM ET -
Starbucks: 'We are bakers too'
Starbucks is getting into the bread business.
The Seattle-based coffee chain announced plans Monday to buy San Francisco-based Bay Bread and its La Boulange bakery brand for $100 million.
"This is an investment in our core business," said Howard Schultz, Starbucks chief executive, in a conference call with financial analysts. "After more than 40 years, we will be able to say that we are bakers too."
Schultz said one-third of Starbucks transactions include MORE
Ben Rooney - Jun 4, 2012 5:21 PM ET
- SPAM gets slammed(1:06)
- Boeing's 787 nightmare is over(0:58)
- Restoration Hardware rides housing wave(1:24)
- Safeway is a safe haven ... for now(1:17)
- Goodyear stock rising like its blimp(1:18)
- Sony fires first shot in gaming price war(1:05)
- Investors say 'da' to McDonald's(1:01)
- Samsung sinks: No winners in mobile?(1:13)
