SBUX - Starbucks Corp

[rkbabang]

I also do not like SBUX coffee. So I always get a latte at SBUX.

 

Don't laugh, but I use McCafe to make my coffee at home. I think it is better then anything else I have tried.

 

I've never bought the beans ti take home, but if I need a coffee and there is a Starbucks and a McDs, I'll go to McDonalds every time. Their coffee has improved tremendously. But from what I've heard this is regional.  They use different coffee roasters in different regions, so unlike their food, their coffee isn't consistent from region to region. They have 4 or 5 different regions in the US and it is different in Canada as well. They use green mountain in the north east and it isn't bad at all.

[DooDiligence]

I alternate between Starbucks dark beans (ATM French roast) & Community dark roast beans.

 

Grind them to powder & let 'er rip.

[boilermaker75]

I also do not like SBUX coffee. So I always get a latte at SBUX.

 

Don't laugh, but I use McCafe to make my coffee at home. I think it is better then anything else I have tried.

 

I've never bought the beans ti take home, but if I need a coffee and there is a Starbucks and a McDs, I'll go to McDonalds every time. Their coffee has improved tremendously. But from what I've heard this is regional.  They use different coffee roasters in different regions, so unlike their food, their coffee isn't consistent from region to region. They have 4 or 5 different regions in the US and it is different in Canada as well. They use green mountain in the north east and it isn't bad at all.

 

I have only found McCafe in grocery stores already ground. I have never seen beans. The ground coffee I get is much, much better than getting a cup at our local McDs. I suspect the stuff in the grocery is the same everywhere and the stuff I get already brewed at my local McDs is different.

[Spekulatius]

I have a grinder (Vario) and Espresso maker setup at home and buy my beans at Costco. I typically bought the French roast, but switched to other beans a while ago. Right now, I am buying beans from Costco from some roaster in Vermont. I hate switching beans because every time I do so, I need to adjust the grinder. I found the beans from Costco to be quite good and the prices impossible to beat.

 

I like Starbucks, but not so much for the coffee, but rather because the shops are a pleasant environment , if need to to make a break on a road trip or have some time to kill.

[hardincap]

I wonder why Buffett never bought starbucks? IIRC, he bought KO at around 15x earnings. Starbucks hasnt gone to those levels since the '08 recession, but there were still pockets of attractive valuations especially last year. The business looks like it passes all Buffett's tests - exceptional economics, pricing power, moat, huge tailwinds, simple and predictable, growth opportunities. Anyone have a guess?

 

[clutch]

I wonder why Buffett never bought starbucks? IIRC, he bought KO at around 15x earnings. Starbucks hasnt gone to those levels since the '08 recession, but there were still pockets of attractive valuations especially last year. The business looks like it passes all Buffett's tests - exceptional economics, pricing power, moat, huge tailwinds, simple and predictable, growth opportunities. Anyone have a guess?

 

The dude doesn't drink coffee. Even if he did, he would never pay $5 for coffee.  ;D

[mcliu]

I wonder why Buffett never bought starbucks? IIRC, he bought KO at around 15x earnings. Starbucks hasnt gone to those levels since the '08 recession, but there were still pockets of attractive valuations especially last year. The business looks like it passes all Buffett's tests - exceptional economics, pricing power, moat, huge tailwinds, simple and predictable, growth opportunities. Anyone have a guess?

Economics for coke is much better.

[KCLarkin]

Mcliu, based on a quick first pass the economics look much better for SBUX. Why do you think KO has better economics?

[TheAiGuy]

I wonder why Buffett never bought starbucks? IIRC, he bought KO at around 15x earnings. Starbucks hasnt gone to those levels since the '08 recession, but there were still pockets of attractive valuations especially last year. The business looks like it passes all Buffett's tests - exceptional economics, pricing power, moat, huge tailwinds, simple and predictable, growth opportunities. Anyone have a guess?

 

Probably because the Cold War isn’t about to end again, opening up world wide markets to major American brands for the first time.

[stahleyp]

Bravo, starbucks. Bravo. Announced a buyback today. Everyone is stopping and they are doing it.

[AzCactus]

I think it's super ballsy and potentially brilliant for a company to be buying stock back.  So many of these companies only buy back when stock is super high and not when things are a bit less rosy.  Props to them.  Still think their coffee is waaaayyy too expensive though.

[Gregmal]

SBUX will be hurt absolutely zero, longer term from this. I dont own it; I actually hadn't been paying attention to it, but the fact that theyre buying stock here is impressive. I see a lot of company executives totally freezing up like chumps here. No one wants to looks like a fool for a quarter or two. If you are cash rich/can borrow at low rates, this is likely a generational opportunity.

[TwoCitiesCapital]

It helps that SBUX has had a super left leaning and progressive CEO who bought them a lot of good will with things like PTO for part-time workers and etc. I don't see this as being particularly harmful to their image because of their goodwill.

 

Not as if they're begging for a govt handout after negligently killing hundreds of people and buying back 10s of billions of stock....

[stahleyp]

SBUX will be hurt absolutely zero, longer term from this. I dont own it; I actually hadn't been paying attention to it, but the fact that theyre buying stock here is impressive. I see a lot of company executives totally freezing up like chumps here. No one wants to looks like a fool for a quarter or two. If you are cash rich/can borrow at low rates, this is likely a generational opportunity.

 

Yeah, I have never owned it until yesterday. It's not large but it'll make sure I keep an eye on it

[Castanza]

https://www.marketwatch.com/story/luckin-coffee-shares-sink-83-after-special-committee-investigates-misconduct-suspends-chief-operating-officer-2020-04-02

[blainehodder]

So there is no real China competitor but perhaps also perhaps no significant demand for coffee there?

[Castanza]

So there is no real China competitor but perhaps also perhaps no significant demand for coffee there?

 

Exactly.

 

Once I got past the laughter of yet another Chinese company fudging numbers I was wondering the same thing. Hopefully this presents a better buy opportunity in SBUX.

[coc]

SBUX is doing it right -- there is limited demand for coffee there, but what demand there is, SBUX captures it by offering a luxury environment. SBUX has a great franchise - hard to go after them.

[mcliu]

It's a great company, but it's still trading at 22x 2019 earnings.

They'll probably lose money this year and won't get back to those levels for maybe 1 or 2 years or longer.

So isn't it somewhat over-valued?

[sleepydragon]

I bought some when it was near 50.

Should have bought more

[Pauly]

SBUX is in the enviable position that when things return to normal, a lot of their competition (smaller local coffee shops) will have gone out of business. In a couple of years their market share could be significantly higher than today.

[rb]

So there is no real China competitor but perhaps also perhaps no significant demand for coffee there?

You do know they also sell tea.

[chrispy]

I think sales will jump up close to where they were once people can get back to their routines. Folks are getting stir crazy and something like a Starbucks coffee before their work day or meeting a friend there will be the biggest treat for a while

[Gregmal]

I think sales will jump up close to where they were once people can get back to their routines. Folks are getting stir crazy and something like a Starbucks coffee before their work day or meeting a friend there will be the biggest treat for a while

 

Yup.. I would pay $1000 to go out to a decent restaurant and have a few drinks right now. Or go see a shitty movie. Or catch a hockey game.

[Castanza]

I bought some when it was near 50.

Should have bought more

 

I was hoping to see this dip back into the 40’s. DNKN also looks a bit interesting although their leverage and the whole “asset lite” thing always gives me pause. I never know how to views companies like them, MCD and other franchise chains because of that. So generally I just stay away.