Filed under: Earnings reports, Competitive strategy, Apple Inc (AAPL), Starbucks (SBUX), McDonald’s (MCD)
Shares in Starbucks (NASDAQ: SBUX) are as hard to understand as those of nearly any other massive public company in the U.S.
In the fiscal year ending September 30, revenue for the company was up over 20% to just shy of $9.4 billion. Operating income rose 18% to $1.054 billion, according to the Starbucks 10-K. But, the price of the company’ stock dropped from just over $40 in November 2006 to the current price of $20.13.
Starbucks can’t fix its Wall Street problems all at once, but it could look at the things investors don’t like about the company and begin to address them.
First, investors believe that McDonald’s (NYSE: MCD) will take a great deal of the Starbucks premium coffee business. The fast-food chain states its earnings are being helped by its push into high-end coffee. Starbucks already knows whether it is being hurt by McDonald’s. It certainly keeps enough detail on each of its local outlets. Perhaps it could share that data with investors.
The other large knock on the coffee company is that it is opening stores too fast in the U.S. It ends up competing against itself in some markets. The facts about this should not be hard to come by. Starbucks certainly selects locations based on not taking business from its other outlets. If those decisions are working, perhaps the company could pass that along.
The last significant question about the firm is whether its move into breakfast foods, music, and a partnership with Apple (NASDAQ: AAPL) are doing anything for the bottom line.
Starbucks might do superior with Wall Street if it would just give out a little information.
Douglas A. McIntyre is an editor at 247wallst.com.
Entries (RSS)