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Posted
Sep 10 2009, 09:06 AM
by
Louis Navellier
Rating:
 Quietly, Starbucks (SBUX) has hit a 52-week high of $20.21.
It may not be a coincidence that this happened as McDonald's (MCD) same-store sales posted an increase of just 2.2%, a disappointment. Starbucks may be taking back some of its core coffee drinkers. The coffee shop chain has certainly done everything in its power to restore the value of its brand and reclaim its franchise.
Bing: Starbucks taste test results
Moody's acknowledged this early in the week by upgrading the Starbucks short-term and commercial paper rating from A-3 to A-2.
"The ratings are based on Starbucks' leading market position and excellent brand recognition in the specialty coffee market in the U.S., as well as a history of strong cash flow generation," said Jackie Oberoi, an S&P credit analyst, in a statement.
Starbucks struggled early in its turnaround attempt just after founder Howard Schultz returned to the CEO's job in January 2008. The company's shares traded close to $20 then. Schulz cut costs and fired 12,000 people, but he could not reverse a sharp decline in revenue. By November 2008, the firm's stock was trading just above $7.
The recent success of Starbucks is improbable. McDonald's has many more locations and its premium coffee has gotten very good grades from places like Consumer Reports. Some analysts believed that McDonald's and Dunkin Donuts seized many of Starbucks regular customers. Schulz had no clear way to counter this, so he tried a large number of tactics, probably hoping that some of them would work
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Posted
Jun 03 2008, 11:18 AM
by
Kim Peterson
Rating:
Starbucks has finally called off the T-Mobile hounds and now offers two hours of free Wi-Fi a day to customers. Well, it's not completely free, but it's close. Here's how to get it: First, spend at least $5 on a reloadable Starbucks card, which you can get in stores. Then, go online and register for Starbucks' rewards card program. Then create an AT&T Wi-Fi account. You have to agree to let AT&T send you four spam "special offer" e-mails a year. You also have to use the Starbucks card once a month, which means you have to buy something at Starbucks once a month. Sounds like a bit of work, doesn't it? Starbucks shares are down 2% today to $17.57. Why the sudden burst of generosity?
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Posted
Feb 17 2009, 09:50 AM
by
Anthony Mirhaydari
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In the latest sign that it's going down market in order to survive, Starbucks (SBUX) has launched a line of instant coffee.
The new VIA Ready Brew, which will sell for about $1 a cup, is a "transformational instant coffee that replicates the body and flavor of Starbucks coffee," the company says.
CEO Howard Schultz, who dwells on the "Starbucks experience," finally seems to realize that the credit-fueled consumer behavior that helped build his empire is over. Food spending is dropping sharply -- down 3.7% in 2008's fourth quarter, the steepest drop in the 62 years the government has been keeping track.
Already Starbucks plans to offer "breakfast pairings" value meals. Now it can get more space in grocery stores, taking the coffee fight to well-entrenched competitors like Folgers owner J. M. Smucker (SJM), Nescafé maker Nestle (NSRGY), and Sanka seller Kraft Foods (KFT).
Besides the obvious value proposition,
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Posted
Jun 17 2009, 06:31 AM
by
John Reese
Rating:
 Once upon a time, Starbucks (SBUX) was king of the coffee world. Sales were sky-high, new stores seemed to be popping up on every corner, and the firm's stock was going through the roof.
But then, the shine started coming off the coffee kingdom. The same massive expansion that symbolized Starbucks' incredible growth brought with it problems -- the cannibalization of profits among stores and the transitioning of the company's image from trendy, cutting edge upstart to omnipresent behemoth. Earnings hit red territory in mid-2008, and, further hampered by the economic downturn, sales started dropping last year as well. From May 2006 through November of last year, Starbucks' stock plunged nearly 80%.
Since then, however, Starbucks shares have had a renaissance, rising almost 100% since their Nov. 20 low. That has raised the question: Is the coffee king ripe for a rebound?
Unfortunately for Starbucks shareholders, I don't think so. In fact, my Guru Strategies at Validea.com are hot on another coffee brewer right now, one whose ascent began as Starbucks' star began to fade.
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Posted
Nov 11 2008, 09:22 AM
by
Minyanville
Rating:
Relax, the world isn't going to end just because Starbucks reported a 97% drop in fourth-quarter profits.
The company expects to make money in 2009 and plans to open new stores, though at a slower pace than in previous years. Customers are cutting back on their morning java jolt in the downbeat economy, but closing costs for about 600 US stores are largely responsible for the company's dismal fourth-quarter performance.
Starbucks said fourth-quarter profits fell to $5.4 million, or $0.01 per share, from $158.5 million, or $0.21 per share, for the same period last year. The company earned $0.10 per share, excluding the cost of store closings. Still, analysts expected Starbucks to earn $0.13 per share
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Posted
Sep 29 2009, 03:47 AM
by
Douglas McIntyre
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Starbucks (SBUX) has been talking about its foray into the instant coffee business, and its product, “VIA Ready-Brew,” finally launches in the U.S. and Canada today.
According to the company, VIA "is made with a proprietary, U.S. patent-pending microgrind technology to preserve the coffee’s taste, quality and freshness.” Chief executive Howard Schultz sees the launch as a way to get the firm into the $21 billion instant coffee business using its brand power as leverage (see video below).
It may not matter if VIA is “better” than the coffee that Starbucks sells in its stores, since that will be a subjective decision on the part of consumers. What will matter is that the margins on the instant product are probably very high, at $2.95 for a three pack.
That will help Starbucks keep the momentum that cost cuts and slightly improving sales have given to its share price, which, at above $20, is more than double its 52-week low.
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Posted
Oct 06 2009, 05:53 PM
by
InvestorPlace
Rating:
 This article was written by InvestorPlace.
Most companies would have trouble dealing with a direct competitor that is fifty times their size. Caribou Coffee (CBOU) seems to have defied the odds. Since the beginning of the year, the coffee chain's stock is up 250% to almost $6, while Starbucks (SBUX), the 600-pound gorilla of the industry, is up 110%.
Bing: Coffee Stocks
Caribou has been successful by being where Starbucks isn't, and by watching costs. In the quarter than ended in June, revenue was actually down very slightly to $63 million, but expenses dropped as well, from $26 million in the same quarter a year ago to under $24 million.
Caribou has not attempted to do what Starbucks has, which is become everything to everyone in the high-end coffee and snack business. Caribou has only 500 stores in 16 states. Caribou does not have locations is areas that are highly crowded and competitive, like the New York City area or Boston where Starbucks is a major presence. Caribou's stronghold is in the Midwest.
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Posted
Dec 11 2008, 12:56 PM
by
Minyanville
Rating:
Starbucks employees driving to the corporate headquarters in Seattle are greeted with a billboard proclaiming, "4 bucks is dumb."
It's part of the campaign for McDonalds' latest offering: Espresso - and the hamburger chain plans to slug it out with Starbucks on price. That looks like a smart move in the current economy.
Other billboards in western Washington State, including some near Starbucks, declare "large is the new grande" as McDonalds launches class warfare against what it sees as a hopelessly snobby competitor.
So far, Starbucks has remained blissfully above the fray. The bet: Its customers would never go to McDonalds for a small, medium or large anything.
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Posted
Apr 10 2008, 09:44 AM
by
Anthony Mirhaydari
Rating:
Pity Howard Shultz. Even after retaking the reins of his global latté-brewing behemoth, vowing to return the company to its roots and launching a six-point plan of attack, his Starbucks shares continue their sickening slide. With this week's launch of the new Pike Place Roast, he's now busily touting efforts to "reinvent brewed coffee across America." Unfortunately, brewed coffee isn’t exciting, and with a much lower-selling price than Starbucks' espresso-based drinks, its promotion will surely erode margins.
The other growth initiatives are similarly lackluster: New coffee machines, a customer rewards program, a stronger focus on environmental initiatives, and a dedicated web portal to accept new ideas from anyone who cares. The last smacks of desperation. So, being a native Seattleite, I feel obligated to offer a simple, four-point rescue plan:
1. Stop focusing exclusively on coffee: Yes, Starbucks needs to do everything it can to improve its image as a purveyor of premium coffee. The move towards pre-ground beans and automatic espresso makers left it vulnerable. This is especially true now that McDonald’s and others are offering vastly improved and in some cases superior coffee, mitigating the company’s claims to quality.
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Posted
Aug 20 2009, 12:10 PM
by
Kim Peterson
Rating:
 Starbucks (SBUX) is delivering bad and good news to customers this week. It's raising prices. And it's lowering prices.
The coffee giant will charge customers more for bigger, fancier drinks, The Wall Street Journal reports. The venti caramel macchiato, for example, will cost 25 cents more. The cost to add another espresso shot or more milk or syrup will also rise by 10 to 15 cents. Bing: More on Starbucks' prices
But smaller drinks, such as a tall latte or a tall coffee, will cost 5 or 10 cents less. The new prices are being rolled out in some cities initially, and will go nationwide in a few months. Is a price change the right move in this economy? Starbucks is preparing for some pushback,
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