Another Thank You, Red Sox, Starbucks’ Music, Crime Pays
– Thanks for the mention.
– This is great
– Well this took way too long…
– Can you believe it? From thief to “consultant” in months..
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Starbucks “entertainment”, Lead Paint, Sequoia, Gphone
– Or, you could just get rid of it, you were better off before it.
– Believe it or not, we are still playing this game
– One of the greatest funds ever.
– Coming soon………
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Starbucks “entertainment”, Lead Paint, Sequoia, Gphone
– Or, you could just get rid of it, you were better off before it.
– Believe it or not, we are still playing this game
– One of the greatest funds ever.
– Coming soon………
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Here is another opinion on Starbucks (SBUX).
Disclosure (“none” means no position):None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
I have calmed down enough to finally put some thoughts down.
Starbucks (SBUX) U.S. comp sales fell by the mid-single digits on a percentage basis due to lower traffic (no kidding). U.S. same-store sales fell 1% in the Q1, the first drop since Starbucks began breaking out the figure in 2004. Global same-store sales rose just 1% in that period, the lowest figure since Starbucks went public in 1992.
Starbucks now says it expects earnings for Q1 of 15 cents a share, down from the prior year’s 19 cents (21% decline), with revenue up 12%.
As a result FY2009 earnings to be “somewhat lower” than the last year’s 87 cents. Starbucks said it can’t be more specific “due to the lack of visibility into near-term economic conditions.” In January they projected earnings of 96 cents to 98 cents. Funny how they can be very specific when expecting an increase but when a decrease is in the cards, they just cannot finger it. Translation? It will be very bad…
Althought, management does have a history of deceiving shareholders.
Looking at this (and after reading yesterday’s excuses)one can only assume we are approaching a depression until one looks at the other headlines from late in the day Wednesday.
Mac Sales Boost Apple’s (AAPL) Profit
Amazon’s Revenue Soars 37%
So I guess the reasoning now is that folks will pony up $3000 for a Mac but not $4 for a latte? Maybe the myriad of items being bought on Amazon (AMZN) each day are under $4?
The problem is that Starbucks has stopped giving people what they want. Schultz actually said people are “spending less” at his stores but “not going anywhere else”.
DELUSIONAL….. Howard, you sell an addictive beverage that people cannot go without. If they are not getting it from you, they are getting it from someone else. This is like an old prostitute whose business is in decline thinking people have just stopped using prostitutes. No, they are, just not you.
Has be bothered to look at the results at Mcdonald’s (MCD)? Saying “we are above them” while sales crash around you is nice if you are the captain of the Titanic going down with the ship, if you are the CEO of the company, investors are going down with you.
The final insult? Schultz refuses blame for the last three years.
“While this is having a substantial impact on our performance, I am as enthusiastic as I was when I returned to Starbucks as CEO 3 1/2 months ago about our opportunity to reinvigorate the Starbucks Experience.” Schultz is giving the impression that he “needs time” to work the turnaround.
Earth to Howard, you have been Chairman the whole time. You never left. One could say you have overseen this disaster. What should they do? Here, try this, it can’t do much worse.
One could honestly say that at least Phillip Schoonover at Circuit City (CC) acknowledges what he is doing is not working and things need to change dramatically. Schultz is blaming…housing….sad…
I wish I had shorted this thing over 15 months ago when I first pointed out the problems killing it today.
Disclosure (“none” means no position):None (thankfully)
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Starbucks (SBUX) said the economic environment was the “weakest in our company’s history” and that it was being hurt by its heavy presence in California and Florida, which have been hard hit by the housing downturn. That’s right, Starbucks actually blamed housing………….
I can’t even get into this now. The thoughts and biting comments are flooding me so fast I feel like that guy in the movie “Scanners”.
Housing? Unbelievable……..
Of all the excuses…housing?
More on this tomorrow…
Disclosure (“none” means no position):None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Hillary, Pennsylvania, Food, Starbucks
– People are really underestimating the importance of this
– Can you win nationally if you cannot win here?
– Why are prices so high?
– Where are the ideas?
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Hillary, Pennsylvania, Food, Starbucks
– People are really underestimating the importance of this
– Can you win nationally if you cannot win here?
– Why are prices so high?
– Where are the ideas?
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Thank-you, Baristas, A fool, Citi
– Thank you for the mention.
– This is actually a good idea at Starbucks (SBUX).
– Could he be any more gullible?
– No cut here
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Thank-you, Baristas, A fool, Citi
– Thank you for the mention.
– This is actually a good idea at Starbucks (SBUX).
– Could he be any more gullible?
– No cut here
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
“We deliberately raised more capital than we lost last year … we believe that will allow us to not have to go back to the equity market in the foreseeable future,” Merrill Lynch (MER) CEO John Thain
This statement comes the same week both G. Kennedy Thompson at Wachovia (WB) and Jeff Immelt at GE (GE) were force fed prior statements along the same lines and shares in their companies were savaged. Thompson said Wachovia’s dividend was safe and Immelt said GE’s earnings were “in the bag”.
What does Thain gain with the proclamation? Nothing. No one believes what comes out of banker’s mouths today anyway, why say it?
It get’s even worse when just hours later he clarified the statement to mean “raise additional cash through equity”. Super, nice job John. Close the door and then go back and open it up a crack.
Now he either will be forced to take a bad deal on a debt offering or asset sale to raise cash if necessary in order to save face. If he does another equity or preferred sale, his reputation at the bank and with shareholders is crushed even before it has a chance to grow. Let’s say he is right? So what? That and $5 will get him a latte’ and Starbucks (SBUX). Had Merrill be forced to tap equity markets again, it would have been bad but now if they do, Thain will most likely be getting his resume updated.
Thain had absolutely nothing to gain by making the proclamation…….nothing. He now has created an atmosphere in which those so inclined (CNBC’s Charlie Gasparino) are going to make sport out predicting when Merrill will need more cash and how they will get it.
I always thought rule #1 was “under promise and over deliver”. Thain ought to see the example set by Berkshire’s (BRK.A) Warren Buffett
Disclosure (“none” means no position):Long WB, None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
“We deliberately raised more capital than we lost last year … we believe that will allow us to not have to go back to the equity market in the foreseeable future,” Merrill Lynch (MER) CEO John Thain
This statement comes the same week both G. Kennedy Thompson at Wachovia (WB) and Jeff Immelt at GE (GE) were force fed prior statements along the same lines and shares in their companies were savaged. Thompson said Wachovia’s dividend was safe and Immelt said GE’s earnings were “in the bag”.
What does Thain gain with the proclamation? Nothing. No one believes what comes out of banker’s mouths today anyway, why say it?
It get’s even worse when just hours later he clarified the statement to mean “raise additional cash through equity”. Super, nice job John. Close the door and then go back and open it up a crack.
Now he either will be forced to take a bad deal on a debt offering or asset sale to raise cash if necessary in order to save face. If he does another equity or preferred sale, his reputation at the bank and with shareholders is crushed even before it has a chance to grow. Let’s say he is right? So what? That and $5 will get him a latte’ and Starbucks (SBUX). Had Merrill be forced to tap equity markets again, it would have been bad but now if they do, Thain will most likely be getting his resume updated.
Thain had absolutely nothing to gain by making the proclamation…….nothing. He now has created an atmosphere in which those so inclined (CNBC’s Charlie Gasparino) are going to make sport out predicting when Merrill will need more cash and how they will get it.
I always thought rule #1 was “under promise and over deliver”. Thain ought to see the example set by Berkshire’s (BRK.A) Warren Buffett
Disclosure (“none” means no position):Long WB, None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Starbucks (SBUX) Chairman and now CEO did an interview with Business Week and a read of it shows a stunning lack of grasp of reality.
The “A” are Schultz answers
Q: So people have been spending less on $4 lattes?
A:No question about it. Our research suggests they’re not going anywhere else; they’re just coming to us less frequently. So we have to do everything we can to demonstrate to our customers that Starbucks is an affordable luxury.
OK. So, if they are not going anywhere else and just not coming to you Howard, how can we explain the increasing traffic counts at McDonalds for breakfast and coffee each quarter? Is McDonalds cloning existing customers? I can give you the names of a few dozen who have made the switch.
Are former Starbucks customers just not drinking coffee anymore?
Q:Earlier you said to me, the media has made such a huge deal about all of Starbucks’ competition. So tell us straight out what the story is here. Have you been hurt by the premium coffee sold at McDonald’s (MCD) or by Dunkin’ Donuts getting more aggressive?
A:First off, I don’t think there’s premium coffee being sold at those fast-food places. Second, this is not about the competition. Our customers are not buying a hamburger and fries and then going to get espresso. That’s not the case. What is the case is that there’s a downturn in the economy. As a result, people are coming in less often than they did a year ago. But we control our own destiny. And what we strongly believe is if we take care of our customers, produce the kind of product that is distinctive, and exceed their expectations, we’re going to be in great shape. But we’re going to couple that with relentless innovation that you’ll begin to see in the marketplace in the months ahead.
Wow…. “It’s not about the competition”…….That is stunningly reminiscent to a quote from former CEO Jim Donald just over a year ago when the stock was trading near all-time highs.
Sorry Howard but despite what you think, you do not exist in a consumer category of one.
While your customers are not “getting burgers and fries” with their coffee as you so condescendingly pontificate, they are going there for COFFEE. Based on results for the past year, they are doing so in droves.
When you started Starbucks you were a pioneer in the industry. Now, it is crowded with competition. It just cannot be denied.
I am sure there is a small segment of the population that can tell the difference between coffee roasts just like there is one that can do so with wine. If we admit that we also have to admit the overwhelming majority of the population cannot. This is ok if you have 1,000 restaurants nationally that cater to an elite crowd but when you have 14,000, it is the tastes and preferences of the majority that control your destiny. Schultz has not realized this or refuses to admit it.
Let’s be honest here. If I buy a vente caramel macchiado or a hazelnut latte, by the time the milk, syrup and caramel are poured over the espresso, if there really anyone who can tell if it is “super premium”, “premium” or just “really good” espresso beans? I doubt it and would really question anyone who said they could. Again, there may be a select few who can, but they will not support a 14,000 store chain.
That being true, then we now have a generic aspect to the product. If the product becomes generic, then price rules.
Schultz’s refusal to admit he has competition is very bad news for shareholders. It means that there won’t be any moves from the company to address to the apparent non-existing competition anytime soon. Too bad….
Here is the whole interview.
Disclosure (“none” means no position):Long MCD, none
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Early reports are that response to Stabucks (SBUX) social site mystarbucksidea.com has been positive.
About 300 suggestions were posted in the first hour after the shareholders meeting, which drew a crowd of 6,000 and by the end of the week, more than 100,000 votes had been cast. An algorithm built into MyStarbucksIdea pushes the most popular ideas to the top by factoring in the number of votes, how recently votes are cast and the volume of comments an idea has generated.
While this does show Starbucks is “listening” and could lead to the discovery of the next “big idea”, the concept is fraught with risk. For instance, the first ideas Starbucks promised to enact based on customers’ ideas were ones it had already made: to offer free wireless Internet access in stores and rewards through its loyalty car. So, to date they really have not enacted anything based on customers needs or desires.
Here is where the potential downfall comes in. As the site gains in popularity, and I think it will, the hard core users will dominate the site. That will lead to their ideas also taking prominence on it. Their ideas may benefit their demographic but may not be what is best for the company, trying to serve people at 14,000 locations. Starbucks needs to appeal to a broad range of people, not just those willing to dedicate hours a day trying to push a limited agenda.
Can anyone envision a scenario where a competitor hires a team of folks just to jam the site with ridiculous ideas simply to distract management? I am not suggesting McDonalds (MCD) would do that but I can see thousands of smaller competitors jumping in, or enacting the ideas there and then saying “at least we are listening to you”.
Should these folks then feel “ignored”, the site could morph into a very real company sponsored soapbox of anger. In this case, what was designed as a wonderful idea sharing platform, could become an obstacle to constructive dialogue as to the company’s future. Ignored ideas will then be held up to the “what if you had listened to this” scenario should results not satisfy investors. This is very bad…it illicits second guessing.
Marv Levy, the only coach on the history of the NFL to lead a team to the Super Bowl 4 consecutive times once said, “If you spend too much time listening to the fans, you’ll soon find yourself sitting with them.” A corollary to that could be “do not let the inmates run the asylum.”
Starbucks is in an odd position. They almost have to do the site because they have so lost touch with their consumer it may be the only way for them to understand what is going on out there. I guess any ideas posted there really can’t be much worse than anything coming out of Seattle in the last year and a half. But, unless the site is managed to perfection, it may end up backfiring in a very big way…
Can anyone imagine Berkshire’s (BRK.A) Warren Buffett starting a site so shareholders could give him ideas in what to invest in? Yea…me either..
Disclosure (“none” means no position):Long MCD, None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.
Early reports are that response to Stabucks (SBUX) social site mystarbucksidea.com has been positive.
About 300 suggestions were posted in the first hour after the shareholders meeting, which drew a crowd of 6,000 and by the end of the week, more than 100,000 votes had been cast. An algorithm built into MyStarbucksIdea pushes the most popular ideas to the top by factoring in the number of votes, how recently votes are cast and the volume of comments an idea has generated.
While this does show Starbucks is “listening” and could lead to the discovery of the next “big idea”, the concept is fraught with risk. For instance, the first ideas Starbucks promised to enact based on customers’ ideas were ones it had already made: to offer free wireless Internet access in stores and rewards through its loyalty car. So, to date they really have not enacted anything based on customers needs or desires.
Here is where the potential downfall comes in. As the site gains in popularity, and I think it will, the hard core users will dominate the site. That will lead to their ideas also taking prominence on it. Their ideas may benefit their demographic but may not be what is best for the company, trying to serve people at 14,000 locations. Starbucks needs to appeal to a broad range of people, not just those willing to dedicate hours a day trying to push a limited agenda.
Can anyone envision a scenario where a competitor hires a team of folks just to jam the site with ridiculous ideas simply to distract management? I am not suggesting McDonalds (MCD) would do that but I can see thousands of smaller competitors jumping in, or enacting the ideas there and then saying “at least we are listening to you”.
Should these folks then feel “ignored”, the site could morph into a very real company sponsored soapbox of anger. In this case, what was designed as a wonderful idea sharing platform, could become an obstacle to constructive dialogue as to the company’s future. Ignored ideas will then be held up to the “what if you had listened to this” scenario should results not satisfy investors. This is very bad…it illicits second guessing.
Marv Levy, the only coach on the history of the NFL to lead a team to the Super Bowl 4 consecutive times once said, “If you spend too much time listening to the fans, you’ll soon find yourself sitting with them.” A corollary to that could be “do not let the inmates run the asylum.”
Starbucks is in an odd position. They almost have to do the site because they have so lost touch with their consumer it may be the only way for them to understand what is going on out there. I guess any ideas posted there really can’t be much worse than anything coming out of Seattle in the last year and a half. But, unless the site is managed to perfection, it may end up backfiring in a very big way…
Can anyone imagine Berkshire’s (BRK.A) Warren Buffett starting a site so shareholders could give him ideas in what to invest in? Yea…me either..
Disclosure (“none” means no position):Long MCD, None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.