Starbucks Stock Earnings Crash Update
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- Опубликовано: 14 июн 2024
- Starbucks stock crashed after the last earnings where the company did not achieve the expected growth. When a growth company stops growing, there is a lot of valuation correction. In the video we discuss whether this is a structural Starbucks issue or just general market headwinds. Also, SBUX stock investing risk and reward.
Previous SBUX video - • Is SBUX Stock A Great ...
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0:00 SBUX Stock Earnings
3:21 Conference Call
8:32 Sbux Stock Outlook
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.
:-))))
Another great video, thanks! I think the market is over-heated. And I am concerned that people are focusing less on fundamentals and just chanting the mantra of dollar cost averaging and driving the market higher without considering fundamentals. It is a catch-22 for me. I mean I like stock prices going higher but I also hate buying over-priced stocks and ETFs. Personally, I have stopped buying growth ETFs- they are ridiculously over-valued. Dividend stocks and ETFs are a little better but they are still over-valued. There is some hope with small and mid caps. I am not sure they are undervalued but at least they are less over-valued..This pattern offers a valuable insight for strategic planning. Despite these trends, i have delve deeply into active trading and managed to grow a nest egg of around 100k to a decent 442k in the space of a few months... I'm especially grateful to Kelvin Hurdle, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape
I have seen a lot of Positive posts about Kelvin Hurdle. Please how do I reach him?
He mostly interacts on Telegrams, using the user-name.
@KelvinHurdle
Trading with an expert is the best strategy for beginners and busy investor s who have little or no time to monitor their trades.
Diversifying your investment portfolio is crucial for managing risks effectively, especially in uncertain times.
4 videos in a week? we're getting spoiled. Thank you Sven.
More to come!
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!
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
Thanks for the quick update Sven! Grazie come sempre!
Thank you for your insight 🙏 have great 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.
@@malekhakim7436 When you make it clear to investors in a CNBC interview that you have no clue, I'd say no. We heard what appeared as plain lies. Not working for me.
What do you think about Axcelis Technologies?
Thanks for the update!
Any time!
Thanks for the update Sven!
:-)
Could you make a video on LEG? Had a big drop yesterday on the news of a dividend cut and declining quarterly numbers.
Thank you Sven.
"Stiven, your channel is an excellent source of information! Your ability to find the latest news never ceases to amaze me. How do you manage to keep track of all those news sources?
$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.
hey sven, johnson&johnson are trading at 18 P/E, can you do a video about the stock?
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
Thanks for the update on this I was hoping you’d put out a video I own 50 shares and was wondering if I should buy the dip
No problem 👍
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
Thank you for this video too, can you do one on CVS please?
Lavender oil is often added to formaldehyde for preservation of anatomical preparations in medschool. Not sure whether it will taste like spring to med students. I have a position in this turn around 🤞
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!
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
This
What capital are you living in? I would relocate immediately 🤣
Hahahahahha, faacts@@DaExxorzist
thanks for sharing!
the raw material of coffee has increased, prices increase at the pump, therefore lower consumption, lower profits
Not a significant input
it's still to be demonstrated that the 13 chinese cups will reach anywhere near the 280 japanese cups. They should have reported other sectors where the comparison held.
Blame it on China, almost always a lame excuse.
I think you didn't analyze the business model correctly. Starbux's business was to create an experience, not to sell coffee cups, you cannot just compare the price of the cup, of course it will be more expensive
thanks for sharing, but I feel the business is about coffee, the experience is not different
@@Value-Investing maybe is different depending on the region or country. Here in Costa Rica (a coffe producer country) they are only in premium places, they compete with Juan Valdez, a colombian brand, and Britt, a local. All the three have similar prices. People around those places spend around $50 in a lunch, so they can spend some time in a nice coffe store, with a nice view and pay around $20 is not a problem for this market. Of course you will not see a Starbucks in a low income area, that is why I say it is not a "coffe cup" business
Hello Dear Svan and thanks again!
can i ask why you dont talk about the balance sheet of SBUX?
The company has a deficit in shareholders' equity and at a quick glance you can see that the dividend and buyback is higher than the company's net profit.
Are you looking at this data as well?
Thank you so much for all the work you do for us!
for starters I look at cash flows, which are still a no go, then if that gets more interesting we can look at the balance sheet. Keep in mind it is negative because of buybacks.
@@Value-Investing Thanks a lot!
Way more room to go down. I'm buying it slowly. Thank you Sven.
thanks
Just looking at the long term chart of the stock, this one is a buy.
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.
I went for it :-) If it goes lower, I will buy more.
Make sure to manage the ups and downs
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 :)
Regards for Sven from Starbucks 71usd per share and now 81usd. In less than a month. Thanks
Starbucks up 15% :)
I don’t go to Starbucks anymore because I can’t tolerate Caffeine anymore and I’m far from the only one. In fact, a huge portion of older people are like me yet when you want decaf there, you have a single option if any and are forced to wait 15+ minutes. This is a huge opportunity for them to embrace decaf across their menu.
5:44 exactly my thinking when seeing their products
:-)
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
Could you do CVS health Please?
"...Con un po' di pane..." Love you when you speak italian! 😀
grazie :-)
I won’t be surprised if Bill Ackman starts buying this soon.
I am looking for 1 dollar coffe, Starbacks or not. And they can put their rewards up their ars .
:-)))
Does it make sense to buy a starbucks share now as a beginner to get some experience?
If you want to learn it as a businesd
@@Value-Investing thank you sir
Did not expect Petrol gas station coffee station image to show up haha.
:-)))
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.
The coffee is terrible and the service is not very good. Also, they are not letting employees unionize and creating a lot of negative affects on potential customers. They involvement in the Middle East conflict is also an issue. I would stay away from the stock until the desk settles down. More importantly, $10 for a drink is too much.
thanks for sharing!
5:42 Basic Marketing principals
Rule No 12. The Law of Line Extension: Extending your brand into too many variations dilutes its power. Focus on core strengths.
- 22 Immutable Laws of Marketing defined by Al Ries and Jack Trout
excellent point
The times people considered themselves a fan of this business are over. I almost hear no one still being enthusiastic about their products
Thanks for sharing
Just came back from Japan and the Starbucks there are absolutely packed with people and business is booming. Also prices are much lower than in North America and Europe so there is room for increase
or room to decrease in Europe and US :-)
@@Value-Investing also true haha
I like the commentary you have on the cannibalisation of the brand. I don't want to drink flowers from a cafe. I want coffee.
:-)))
Sven, my daughter is not a coffee drinker but loves the peach iced tea….so don’t discount too much these other products…..she is hooked!
Exactly! Is a great range that attracts non coffee drinkers to the stores!
Can't you buy peach ice tea in every super market?
Kava na poti. Nice.
It’s a strong brand, folks use Starbucks cups as accessories. I would prefer investing in Starbucks compared to Coke. My kids love the drinks at Starbucks too so that’s for the future. For now I will wait but I think 15pe is unlikely but I’m in no hurry.
thanks for sharing
I swear I must be the ONLY investor in the world that isn’t jumping for joy that my Starbucks investment just lost 20%. I’m not one bit giddy and happy about it, I’m pissed off to tell you the truth. and next quarter when it drops another 20% into the 50’s I’m not going to be singing…ewww Starbucks is on sale once again!! 🎶🎶 had to get it off my chest….
:-)))
you had me at "toilet-cleaning lavender products."
:-)
Need its founder back to the helm
didn't then try that a while ago?
surprise, surprise; people are no longer willing to pay $7 for hot brown water.
:-))
2.65 for a tall coffee with cream, just checked
@@johnnyvegas4583 I remember days when the venti was under $2.
I’m Chinese but living in Sydney. The recent times I go back to China, when we craved for coffee, we’d go to some local boutique coffee shops, which aren’t hard to find even in 3rd tier cities. And they do taste good, not like Australian good but decent enough!
If we want some flashy sugary water, there are just too many good choices…
Bingo
I bought the lavender frappachino and it tasted like soap :)
hahahaha
The CEO is out of his depth. I’d rather have a Nespresso latte or cappuccino or my amazing French press with Barraca Batangas for pennies a cup vs $$$ for mediocrity that takes 5-10 minutes to get.
I'm doing my part. One of my New years resolutions. Quit Starbucks. Save a hole lot of money. Plus, coffee is bad for your health anyway
especially Starbucks coffee
I am in.
you know the risk and reward and why, plus you must have a strategy
Do you think the boycotts play into effect for the lower than expected growth?
Shh don’t talk about. Let’s pretend there’s no elephant in the room.
I am not in the US, so don't know how it works there, but China is down 12%, so there is something going on there too
They way the economy is going in the US, inflation sky high, fast food franchisees complaining about low sales, especially from the lower income bracket, but also among middle income families, Starbucks won't have it much better. People will always pick food over coffee if they have to make a decision so pretty safe to assume that they're in for a rocky ride.
Inflation is still high, despite consumers pulling back on spending. It’s the setup to a major recession. Same thing happened in 2008. I remember it well.
But 2008 was a financial crisis caused by banks overlending.
Last few years the credit is more restricted, at least some national banks have set minimal requirements to be able to access a mortgage, do you still think 2008 will repeat itself again? (honest question I was at high school then)
I think most people, at least in the US, are starting to pull back on unnecessary spending. Covid got people used to spending carelessly. Now that excess stimulus savings are starting to dwindle, consumers are starting to max out their credit cards. What do you think is coming next for the consumer, Sven?
time will tell, hard to predict!
I'll consider buying under 60$. For me it looks like it will go lower and lower this year. Economy in the US and in China doesn't look good and families are clearly spending less. You can drink coffee at home and it costs less than 0,5$ for a cup.
I hope it goes to 50.
I am a coffee drinker only but I think the big range of drink attracts a lot of people - non coffee drinkers and kids
Coffe price goes up 50 % on the last 6 months . Also this is a small contribution to reduce earnings
thanks for sharing
I keep thinking Starbucks is not sustainble (I mean who the hell pays double digit for a cup of hot s***) both from investment and consumption perspective, but everytime I past by a store in my area, it is always full with good volume. I mean personally I don't understand the company, their products and what they stand for but deep down I know that it probably isn't going anywhere any time soon.
Starbucks just trying to innovate with the new drinks. I mean who knew Pumpkin Spice Latte would be a thing every fall? That in itself became a viral meme (meme that reminds people to buy PSL at Starbucks). If they don't try, they wouldn't know what works. This is imo the value play of 2024. It may not give the V shape recovery, but this will bounce.
Customer cautious = Gaza Boycott. If that is the case, it will be a transitory headwind. In China it’s a completely different story.
I wouldn't be so sure about it being transitory. Many muslims (and there are approx. 2bn) will never buy Starbucks again. I know I and my friends and family haven't for many years and will not ever again.
@@RashidRasul But if you hadn’t been there for years then this is not applying in your case, isn’t it? I mean, obviously you are not one of those occasional customers they are referring to.
In my view, whenever the situation ends, all end’s up being a matter of time.
@@inigo2531 I used to be a regular customer along with friends. But the occupation is not new and once we became aware of their support, we stopped spending there. A lot more people aware now than before and may do as we did. There are alternatives.
🖕Gaza
I bought at 73, will di it at 63
I‘m shameless, so:
CVS Health next please 👀
Will have to do!
surprise surprise. No one is buying 12 dollar coffees anymore. Can't imagine why....
:-)))
Starbucks needs to compete against tea, which is apart of Chinese culture.
that is correct
Toilet cleaning lavender. Starbucks expands into the household goods sector LOL
$50? You will wait for that until the cows come home!
:-))
I live in Mexico and here Starbucks are crowded as usual, people loves Starbucks. There isn't China only, Starbucks is a global brand. In my opinion Mr. Market overreacted on a not-so-good report, but headwinds are only temporary. SBUX is a good value for investors.
thanks for sharing
in China there's Stalbax
hahahaaha
If Sven answers on your comment with two underchins :-))) than you are right. If he answers with one underchin :- )) you might be wrong. With 4chins he is just trolling around, be aware.
8 * )
When I go out for a coffee it's a boutique shop. They're everywhere, Aro nd every corner in Canada. The food is significantly better, so is the roast, and the price is the same. Specialty coffee is a commodity, like Sven said, gas stations can make lattes out of machines at half the price. People in the comments think people dont want to pay 10$ for a coffee.. wrong.. i don't care, it just won't be a Starbucks. I think its a rough road ahead for Starbucks, they've lost Brand prestige and pricing power.
that is about it!
Update about intc
tomorrow
@@Value-Investing nisi zvucao pozitivno o INTC kao ranije.
Maybe if they should try to pick up their phones
:-))
All respect to all boycotters!
You are in the right path, they feel the pain of your actions
thanks for sharing
again...not for me
Thanks for sharing!
Sorry, I bought few today. 😂
:-)
I mean its not like a i will buy a coffee and a lavender drink, whatever that is, ... so its def cannibalizing
I am looking for a Coffe not some Lavender Toilet Cleaning Matcha 😂😂
What's their moat? Their coffee is horrible in my opinion. I agree a PE of 10 is when I would be interested
You said it all!!!
SBUX is a recession indicator. The stock will recover when the economy recover.
thanks for sharing!
Con un pó di pane 🤣🤣🤣
:-)))
Brand is cool but a business selling coffe for 8$ doesn't look impossible to compete with. No MOAT here
Good point
I think there is a huge moat here. The brand is the moat. Every SBUX store I drive by every morning is packed with Instagram Karen’s.
@@michaelday8838 😀 Another reason to avoid the stores.
@@michaelday8838 Dunkin Donuts is a competitor. They do about the same level of business as SB in my area. Better food imo. Not to mention local organic coffee chains that can compete on both quality and price. Amazon has a huge moat, not this one. But yeah the white women love it, I'd buy at a much cheaper price.
@@michaelday8838 Dunkin is also much much much better about drive thru accessibility on their locations.
err. the depression we're in?
Their coffee is overpriced 💩 - sorry
All recreative business are dropping, the Stripper index also has dropped I expect bas results for DIS next tuesday
thanks for sharing
Where is the CVS video?
will check, but might not be my kind of company!