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Analyst POV

Starbucks Struggles, Hopes Rise

Starbucks (SBUX) reported a disappointing Q2, missing revenue expectations by 6% and seeing a 4% decline in same-store sales. Despite trading at multi-year lows, new initiatives like lower-priced food-drink combinations and energy drinks, along with a bullish Goldman Sachs rating, offer potential for recovery. The company's increased cost efficiency targets highlight efforts to boost performance amidst current challenges.

Starbucks (SBUX) stock has gotten hammered after it reported a disastrous Q2. The company missed revenue by 6% as same-store sales declined 4% when the Street sought a modest 1% year-over-year growth.  The stock is trading at multi-year lows with the consensus doubting improvement in the near term. A couple of recent initiatives around lower-priced food-drink combinations, along with their new energy drinks could provide an offset to previously declining foot traffic.

As a technology investor, I needed to gain a background in Starbucks and gather the information to build a basic model. So, I downloaded the Starbucks data sheet from Daloopa, which allowed me to see detailed KPIs from 2012 to 2024 last quarter. For 2024, the updated detailed guidance post-Q2 is in the sheet, so I can see what it was pre-Q2 and post-Q2. Post-Q2 comparable store sales are expected to decline in single digits versus previously growing 4-6%.

While SBUX increased its cost efficiency target from $3billion to $4 billion for FY23 through FY26, you need a return to growth to getinvestors excited. Goldman Sachs recently initiated coverage of the stock withan out-of-consensus buy. The analyst is “encouraged by recent frequency datapointing to improvements across traffic, app users and Net PurchaseIntent”.  With the stock at multi-yearlows, trading at 15x EV to forward EBITDA, any sign that the energy drink andcombination initiatives are working would be a boon.

Watch the video to see how we gathered the latest Starbucks data for trend analysis:

Download the Starbucks datasheet here

Analyst POV

Starbucks Struggles, Hopes Rise

Starbucks (SBUX) reported a disappointing Q2, missing revenue expectations by 6% and seeing a 4% decline in same-store sales. Despite trading at multi-year lows, new initiatives like lower-priced food-drink combinations and energy drinks, along with a bullish Goldman Sachs rating, offer potential for recovery. The company's increased cost efficiency targets highlight efforts to boost performance amidst current challenges.

Josh Burwick
August 6, 2024

Starbucks (SBUX) stock has gotten hammered after it reported a disastrous Q2. The company missed revenue by 6% as same-store sales declined 4% when the Street sought a modest 1% year-over-year growth.  The stock is trading at multi-year lows with the consensus doubting improvement in the near term. A couple of recent initiatives around lower-priced food-drink combinations, along with their new energy drinks could provide an offset to previously declining foot traffic.

As a technology investor, I needed to gain a background in Starbucks and gather the information to build a basic model. So, I downloaded the Starbucks data sheet from Daloopa, which allowed me to see detailed KPIs from 2012 to 2024 last quarter. For 2024, the updated detailed guidance post-Q2 is in the sheet, so I can see what it was pre-Q2 and post-Q2. Post-Q2 comparable store sales are expected to decline in single digits versus previously growing 4-6%.

While SBUX increased its cost efficiency target from $3billion to $4 billion for FY23 through FY26, you need a return to growth to getinvestors excited. Goldman Sachs recently initiated coverage of the stock withan out-of-consensus buy. The analyst is “encouraged by recent frequency datapointing to improvements across traffic, app users and Net PurchaseIntent”.  With the stock at multi-yearlows, trading at 15x EV to forward EBITDA, any sign that the energy drink andcombination initiatives are working would be a boon.

Watch the video to see how we gathered the latest Starbucks data for trend analysis:

Download the Starbucks datasheet here

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