Starbucks stock crashed after the last revenues where the business did not achieve the anticipated development. When a growth business stops growing, there is a great deal of assessment correction. In the video we discuss whether this is a structural Starbucks issue or just basic market headwinds. Also, SBUX stock investing risk and reward.
Previous SBUX video –
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Blame it on China, almost always a lame excuse.
Who else is talking about toilet cleaning lavender in a value investing video? Only Sven does. I’ve had a good laugh (and learned something). Thank you.
:-))))
Thanks for the update!
Any time!
in China, the many low-cost brands are not really competing with Starbucks. they rarely have premises, when they do it’s mostly quite simple and noisy, most of their orders are mobile phone and delivery. the locals i see in Shanghai are Luckin Coffee, M stand, and Manner coffee. then there are many mom-and-pop coffee shops doing well.
I just got back from Indochina region and I know there are other large chains, but Starbucks is my preferred choice in the region. It’s a reliable haven for western style coffee and comfort. The div looks pretty good, but maybe they’ll cut it.
The amount of price-conscious coffee drinkers in China is enormous, especially the big city gen-z, and Starbucks has lost much of them to Luckin. I haven’t read Luckin’s reports and I wouldn’t trust them if I did (wink-wink), but the higher their margins, the more likely they’ll come after Starbucks. And if they do, I think the outcome is an inevitable, slow and strangling loss of market share and margin.
I say the previous based on observations I’ve made in 1st and 2nd tier cities like Chengdu, Chongqing, Beijing, Tianjin and living in China for 3 year. Luckin is everywhere, they are ruthlessly efficient, have enormous acquired customer base, and they sell volumes.
Thank you for your insight 🙏 have great day
$10 for a coffee – a true bargain .
:-)))
I said it before and I’ll say it again: value investors will never visit Starbucks themselves.
Value investors won’t even buy iPhones, but Apple is an amazing company.
Really? $10 for a coffee ???
@@riccardopaolini1882 I have an iPhone 13 pro that a friend sold to me (used for two weeks) for €600. It’s basically new, but I’d never spend the €1250 that it costs on a phone. This was however a value investment.
the raw material of coffee has increased, prices increase at the pump, therefore lower consumption, lower profits
Not a significant input
The quality is shocking, totally agree, you can get a cup of brown anywhere that tastes the same
It’s just coffee at the end of the day
The CEO at Starbucks will be the death of the company unless the board can make a quick replacement. Jim Cramer’s interview with the CEO shows that the CEO is clueless.
Since you’re clued up can you explain what he’s supposed to do in the face of the boycotts?
@@RoTelnCheese He believes that the only problem is that he hasn’t properly conveyed the value of Starbucks coffees to customers. Jim Cramer trashed this CEO on that point.
Can he even get a full year in before he’s kicked to the curb ? Sheesh
@@johnc4789I disagree here. I believe that SEO is very well aware that the cause of the problem is a boycott. But this is too dangerous political minefield and every step is wrong. Hence, the vague corporate bullshit about value.
5:16 Yes, when Starbucks started it filled a consumer interest in better coffee. It helped raise the standard. Now every city has much better coffee shops and there’s no way they can compete with that in terms of quality. So they’ve becoming the McDonalds of coffee, coming up with all kinds of high sugar drinks that many of us original customers have no interest in. It’s only a matter of time before they are out-competed on sugar drinks as well.
I would agree that they are out of touch with trends. People are avoiding sugar and carbs now and Starbucks isn’t really recognizing that with the new drinks they are offering so people just quit going in all together. My wife is one of those. She used to go almost every day, and now, only on road trips.
@@mylesgray3470 Agree. They should offer more and interesting sugar-free coffee or caffeinated drinks and food. Perhaps team up with some onllne fitness influencers, sports or some energy drink brands. Try something fresh!
Thanks for the quick update Sven! Grazie come sempre!
4 videos in a week? we’re getting spoiled. Thank you Sven.
More to come!
I do think SBUX CEO might not understand SBUX culture, starbucks is not about value for money (up to a certain price point), its not about 50 different drinks with bubble tea names.
Starbucks is about providing a cosy and comfortable cafe environment for customers to meet and hangout, that’s why people pay premium for their coffee to hangout in their outlets, normally their outlets are located in the most visible parts of the foot traffic.
Starbucks is the only specialized coffee co. without coffee scents in ther outlets and nowadays they provide wooden bench for their customers and the customers decided that there is no point in paying premium as there are plenty of alternatives available with cosy, comfortable chairs and with genuinely nice coffee scents.
There is no Starbucks in my city (capital city in Europe). They were too slow in 90’ies and now there is no room already. Saturated market. Still I am holding few shares bought at 50$. Would add more probably, at pe<15. It is a very strong brand in USA. International is a bonus, if we will get some growth.
This
What capital are you living in? I would relocate immediately 🤣
Hahahahahha, faacts@@PhilippVienna1990
thanks for sharing!
Sven, I was one of your viewers who asked about Starbucks, and you graciously replied before, thank you.
I think you nailed it here Sven. They are straying away from their original concept and trying stupid gimmicks to attract new customers. McDonald’s and Dominos have tough competition but continue to succeed without cannibalizing their brand too much. The stock is not a value yet, not at 20.
THanks Mark!
I remember Svan and everyone else said for Meta that at 200 usd is overvalued. Now Meta is closer to 500. Starbucks is a brand its not coffee. Same as you dont go to MCD for burger.
yes, but Meta increased FCF from 12 to 48 billion, a difference compared to Sbux
In that time when it was falling from 250 to 86 it didnt increase:) it did later 🙂
At last i saw not only financial analysis but an insight about how it was in 1912 when starbucks made capuchino – espreso and how their moat have deteriorated nowdays. Good job Sven!
1912? 😂
hahahahahah
Thanks Sven.
Their CFO went on yahoo finance and did not sound neither clear about the issues nor smart in general. Waffle and spin…
Having said that, they’ve been able to return 5-7bn to shareholders in multiple years through dividends and buybacks and if their business stabilises they’ll be returning 6-8% (on 75bn) plus store growth and inflation.
We will soon find out whether Starbucks is the type of business “that an idiot could run, because eventually one will”.
that is correct
I live in Mexico and here Starbucks are crowded as usual, people loves Starbucks. There isn’t China only, Starbucks is a global brand. In my opinion Mr. Market overreacted on a not-so-good report, but headwinds are only temporary. SBUX is a good value for investors.
thanks for sharing
Excellent update Sven, this is by far my favorite format in which to view your content. It is like ASMR to me, Thank you very much
thanks for sharing that! I think this is the most natural to me: stock analysis