In this articleSBUXCustomers wait in a long line at a Starbucks cafe in a terminal at Miami International Airport, in Miami, Dec. 12, 2022.Jeff Greenberg | Universal Images Group | Getty ImagesAir travelers face a host of headaches on their journeys: slow security lines, long waits for plush lounges, the threat of delays or cancellations — and the airport Starbucks.Many travelers, flight crews and even airport employees have at some point encountered long wait times for their Starbucks cappuccinos, cold bre ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Global Market Presence and Expansion - Starbucks operates in 87 markets globally, with a focus on expanding its global store base in both developed and higher growth markets[14] - Total company-operated stores increased by 1,426 to 21,018 in fiscal 2024, with North America adding 533 stores and International adding 893 stores[32] - The company operates in 87 global markets, facing risks from differing cultural, regulatory, geopolitical, and economic environments[82] - International operations are subject to risks such as economic uncertainties, trade restrictions, and delays in store openings, which could negatively impact net revenues and earnings per share[82][83] - The company's China MBU is its second-largest market and is 100% company-operated, contributing significantly to consolidated and international net revenues and operating income[79] - The company faces risks in China, including a highly competitive retail environment, changes in economic conditions, and U.S.-China relations[79] - The company's international operations may face higher occupancy costs and store operating expenses compared to the U.S. due to higher rents and market-specific regulatory requirements[81] Ethical Sourcing and Sustainability - Over 98% of Starbucks coffee is verified as ethically sourced through the C.A.F.E. Practices program[14] - Starbucks operates ten farmer support centers globally, including one in China's Yunnan Province, to ensure the future supply of high-quality green coffee[43] - Starbucks is expanding its use of reusable packaging to reduce landfill waste[44] - Starbucks may incur increased costs related to reducing carbon emissions, plastic use, and implementing sustainability goals, which could affect profitability[101] - Starbucks is subject to evolving ESG regulations, including the EU's Corporate Sustainability Reporting Directive (CSRD), which may increase compliance costs and risks[102] Employee Benefits and Diversity - Starbucks employs approximately 361,000 people worldwide, with 211,000 in the U.S. and 150,000 outside the U.S. as of September 29, 2024[25] - In the U.S., Starbucks' partner base is 70.9% female and 28.4% male, with diverse partners representing 51.9% of the retail team and 37.9% of corporate roles[20] - Starbucks offers 100% upfront tuition coverage for partners through the Starbucks College Achievement Plan and matches 5% of eligible contributions to the Future Roast 401(k) savings plan[21] - The company provides 100% paid parental leave and a Partner and Family Sick Time program for eligible partners working an average of 20 hours or more per week[23] - Starbucks has achieved racial and gender pay equity for U.S. partners performing similar work and is working toward global gender pay equity[25] - Approximately 5% of Starbucks partners in U.S. company-operated stores are represented by unions[25] - The company prioritizes inclusivity in recruitment and engagement, with initiatives like mentorship programs and efforts to address barriers to equal pay[19] - Labor costs are expected to increase due to federal and state legislation, including a minimum salary threshold increase effective July 1, 2024, and California's Assembly Bill 1228, which raises minimum wage and sets working condition standards[98] - Starbucks faces unionization efforts at hundreds of its 10,000+ U.S. company-operated stores, potentially leading to increased costs and operational complexity[98] Financial Performance and Revenue - North America segment accounted for 75% of total net revenues in fiscal 2024, while International and Channel Development segments contributed 20% and 5% respectively[28] - Company-operated stores generated 82% of total net revenues in fiscal 2024, with 52% of total stores being company-operated[31] - Beverages accounted for 74% of retail sales mix in company-operated stores for fiscal 2024, consistent with the previous two years[34] - Licensed stores contributed 12% of total net revenues in fiscal 2024, with a total of 19,181 licensed stores globally[37] - Total licensed stores increased by 735 to 19,181 in fiscal 2024, with North America adding 81 stores and International adding 654 stores[39] - Consolidated net revenues increased 1% to $36.2 billion in fiscal 2024 compared to $36.0 billion in fiscal 2023, driven by net new company-operated store growth[134] - North America segment revenue increased 2% in fiscal 2024, with a 2% decline in comparable store sales and a 5% decline in comparable transactions[134] - U.S. market revenue increased 2% in fiscal 2024, with a 2% decline in comparable store sales and a 5% decline in comparable transactions[134] - International segment revenue declined 2% in fiscal 2024, with a 4% decline in comparable store sales and a 4% decline in average ticket[134] - Total net revenues increased 1% to $36.2 billion in fiscal 2024 compared to $36.0 billion in fiscal 2023[139] - Consolidated operating income decreased to $5.4 billion in fiscal 2024 compared to $5.9 billion in fiscal 2023, with operating margin contracting 130 basis points to 15.0%[140] - Diluted earnings per share (EPS) for fiscal 2024 decreased to $3.31, compared to EPS of $3.58 in fiscal 2023[140] - Capital expenditures were $2.8 billion in fiscal 2024, up from $2.3 billion in fiscal 2023[140] - Company-operated stores revenue increased 1% to $29.8 billion in fiscal 2024, driven by 1,426 net new stores, a 7% increase[142] - Comparable store sales decreased 2% in fiscal 2024, with a 4% decrease in comparable transactions partially offset by a 2% increase in average ticket[142] - North America total net revenues increased 2% to $27.0 billion in fiscal 2024, driven by 533 net new company-operated stores, a 5% increase[149] - North America operating income decreased 3% to $5.4 billion in fiscal 2024, with operating margin contracting 90 basis points to 19.8%[150] - Store operating expenses as a percentage of total net revenues increased 140 basis points in fiscal 2024, primarily due to investments in store partner wages and benefits[144] - The effective tax rate for fiscal 2024 was 24.3%, up from 23.6% in fiscal 2023[146] - International total net revenues for fiscal 2024 decreased by $149 million, or 2%, primarily due to unfavorable foreign currency translation impacts ($252 million) and a 4% decline in comparable store sales ($210 million)[153] - International operating income for fiscal 2024 decreased 15% to $1.0 billion, with operating margin contracting 220 basis points to 14.2%[154] - Channel Development total net revenues for fiscal 2024 decreased $124 million, or 7%, primarily due to a decline in revenue in the Global Coffee Alliance ($125 million)[157] - Channel Development operating income for fiscal 2024 decreased 4% to $926 million, with operating margin expanding 120 basis points to 52.3%[158] - Corporate and Other operating loss increased to $1.9 billion for fiscal 2024, or 5%, driven by incremental investments in technology ($93 million) and partner wages and benefits ($57 million)[160] - Net revenues for fiscal year 2024 reached $36.18 billion, with company-operated stores contributing $29.77 billion[194] - Licensed stores generated $4.51 billion in revenue for fiscal year 2024[194] - Operating income for fiscal year 2024 was $5.41 billion, a decrease from $5.87 billion in fiscal year 2023[194] - Net earnings attributable to Starbucks for fiscal year 2024 were $3.76 billion, down from $4.12 billion in fiscal year 2023[194] - Earnings per share (diluted) for fiscal year 2024 were $3.31, compared to $3.58 in fiscal year 2023[194] - Net earnings including noncontrolling interests for FY 2024 were $3,762.3 million, a decrease of 8.8% compared to $4,124.7 million in FY 2023[197] - Comprehensive income attributable to Starbucks for FY 2024 was $4,109.9 million, an increase of 7.9% compared to $3,810.2 million in FY 2023[197] - Net earnings including noncontrolling interests for FY 2024 were $3,762.3 million, a decrease from $4,124.7 million in FY 2023[207] - Net cash provided by operating activities increased to $6,095.6 million in FY 2024, up from $6,008.7 million in FY 2023[207] - Additions to property, plant, and equipment were $2,777.5 million in FY 2024, compared to $2,333.6 million in FY 2023[207] - Net cash used in investing activities was $2,699.2 million in FY 2024, up from $2,270.8 million in FY 2023[207] - Net cash used in financing activities was $3,718.2 million in FY 2024, compared to $2,990.6 million in FY 2023[207] - Cash dividends paid increased to $2,585.0 million in FY 2024 from $2,431.8 million in FY 2023[207] - Repurchase of common stock was $1,266.7 million in FY 2024, up from $984.4 million in FY 2023[207] - Net proceeds from issuance of long-term debt were $1,995.3 million in FY 2024, compared to $1,497.8 million in FY 2023[207] - Cash and cash equivalents at the end of FY 2024 were $3,286.2 million, down from $3,551.5 million at the end of FY 2023[207] - Income taxes paid during FY 2024 were $1,373.3 million, up from $1,294.2 million in FY 2023[207] - Net earnings for the fiscal year ending October 2, 2022, were $4,124.5 million, an increase from $3,281.6 million in the previous year[212] - Other comprehensive loss for the fiscal year ending October 2, 2022, was $314.3 million, compared to $610.4 million in the previous year[212] - Stock-based compensation expense increased to $306.4 million in the fiscal year ending October 2, 2022, from $275.5 million in the previous year[212] - Repurchase of common stock in the fiscal year ending October 2, 2022, amounted to $548.6 million, a decrease from $890.8 million in the previous year[212] - Cash dividends declared increased to $2.16 per share in the fiscal year ending October 2, 2022, from $2.00 per share in the previous year[212] - Net earnings for the fiscal year ending October 1, 2023, were $3,760.9 million, a decrease from $4,124.5 million in the previous year[212] - Other comprehensive income for the fiscal year ending October 1, 2023, was $349.0 million, compared to a loss of $314.3 million in the previous year[212] - Stock-based compensation expense increased to $312.0 million in the fiscal year ending October 1, 2023, from $306.4 million in the previous year[212] - Repurchase of common stock in the fiscal year ending October 1, 2023, amounted to $35.2 million, a significant decrease from $548.6 million in the previous year[212] - Cash dividends declared increased to $2.32 per share in the fiscal year ending October 1, 2023, from $2.16 per share in the previous year[212] Digital Innovation and Technology - Starbucks' digital platform drives innovation in beverage, equipment, process, and technology, enhancing the customer experience[14] - The company's investments in technology and digital engagement aim to transform and enhance the customer experience, but failure to execute these initiatives could harm financial results[72] - The company may face challenges in recruiting and retaining qualified technology developers, which are critical for digital growth initiatives[97] - The company relies heavily on information technology systems for operations, including point-of-sale processing, supply chain management, and mobile technology[113] - The company's incident response, disaster recovery, and business continuity plans may not resolve issues in an effective and timely manner, potentially causing material negative impacts[113] - The company's systems hardware, software, and services provided by third-party providers are not fully redundant within or across markets[113] - The company may be required to disclose cyber incidents before their full extent is known, potentially leading to uncertainty and reputational damage[113] - Starbucks' cybersecurity program is integrated with the Enterprise Risk Management framework and includes annual cybersecurity awareness training and phishing simulations[116] - The company maintains an incident response plan and insurance coverage to mitigate costs associated with cybersecurity incidents[118] - Starbucks' cybersecurity program is led by a senior vice president and chief information security officer with over 20 years of experience in information security[119] - The company's Board has ultimate cybersecurity and data privacy risk oversight responsibility, with the Audit Committee overseeing cybersecurity and technology risks[119] - The rapid evolution and increased adoption of artificial intelligence technologies may intensify cybersecurity risks[111] - The company has experienced cyber-attacks, including phishing, but these have not had a material impact on operations to date[109] Supply Chain and Commodities - The company purchases significant amounts of dairy and plant-based dairy-free alternatives, with the risk of non-delivery considered remote[43] - Increases in the cost or decreases in the availability of high-quality arabica coffee beans or other commodities could adversely impact business operations and financial results[55] - Increases in the cost of high-quality arabica coffee beans or other commodities could have a material adverse impact on profitability[87] - The supply chain may be unable to fully support current and future business needs, potentially leading to higher shipping costs and inventory write-offs[89] - Any material interruption in the supply chain, such as disruptions in roasted coffee supply, could negatively impact business and profitability[90] - Green coffee purchase commitments account for 86% of the company's total purchase obligations, which stand at $1.3 billion as of September 29, 2024[169] - A 10% increase in commodity prices could decrease net earnings by $21 million, while a 10% decrease could increase net earnings by $21 million, based on hedging instruments as of September 29, 2024[177] - A 10% increase in the U.S. dollar value relative to foreign currencies could decrease net earnings by $24 million, while a 10% decrease could increase net earnings by $24 million, based on hedging instruments as of September 29, 2024[179] Competition and Market Risks - Starbucks faces direct competition from large competitors in the quick-service restaurant sector and the ready-to-drink coffee beverage market, as well as from well-established and start-up companies in international markets[45] - The company faces intense competition in the specialty coffee market, with potential impacts on customer traffic and profitability[99][101] - The company's financial results could be adversely affected by evolving consumer preferences, including shifts in spending away from outside-the-home food and beverages[72] - The company's growth depends on opening new stores profitably, but costs have increased due to construction labor inflation and material costs[77] - The company's global business strategy relies heavily on business partners, including licensees, joint venture partners, and third-party manufacturers[74] - The company relies heavily on Nestlé for the distribution and marketing of its packaged goods and foodservice products, with potential adverse impacts if Nestlé fails to perform[86] - The company's business could be adversely affected by labor shortages and increased competition for talent due to alternative telecommuting employment options[98] Regulatory and Legal Risks - Starbucks is subject to laws and regulations in the U.S. and multiple foreign jurisdictions, with changes potentially resulting in significant costs but not expected to have a material effect on capital expenditures or competitive position[48] - The company is exposed to risks from changing data privacy and protection laws, including GDPR and CCPA, which may limit data usage and result in fines or litigation[105] - Starbucks is subject to complex and evolving U.S. and international regulations, including environmental laws, which could increase compliance costs and capital expenditures[105] - The California Consumer Privacy Act (CCPA) has been modified by the California Privacy Rights Act, effective January 2023, adding additional compliance obligations[109] - 19 other U.S. states have enacted data privacy legislation similar to the CCPA, with 8 in effect by the end of 2024[109] - The global minimum tax under Pillar Two of the OECD's Base Erosion and Profit Shifting initiative will be effective for the company starting fiscal 2025[107] - The Netherlands imposes a flat consumption tax of 26.13 Euro per 100 Liters on cold non-alcoholic beverages (non-milk based)[107] Financial Risks and Market Sensitivity - Economic conditions in the U.S. and international markets have adversely affected, and could continue to adversely affect, the company's business and financial results[56] - Macroeconomic factors, including inflationary pressures, changes in interest rates, and geopolitical instability, could adversely affect the company's financial condition and results of operations[91][93] - Unfavorable economic conditions could lead to supplier or licensee insolvency, increasing bad debt expense and disrupting operations[94] - The company's financial performance is sensitive to changes in consumer discretionary spending, with potential adverse effects from economic downturns or recessions[94] - A 100 basis point increase in interest rates could decrease the fair value of the company's long-term debt by $943 million, as of September 29, 2024[181] Operational Risks - The loss of key personnel, difficulties with recruiting and retaining qualified personnel, or ineffectively managing changes in the workforce could adversely impact the business and financial results[57] - The company faces risks related to food safety, including potential product recalls, contamination, and negative publicity, which could materially harm its business[75] - The company's strategic initiatives include expanding its cold beverage business, increasing store footprint, and adjusting to changing customer preferences due to economic conditions[67] - The company is vulnerable to climate change impacts, including extreme weather events and supply chain disruptions[102] Financial Position and Capital Structure - Cash and investments were $3.8 billion as of September 29, 2024, with approximately $2.1 billion held in foreign subsidiaries[161] - The company has a $3.0 billion unsecured five-year revolving credit facility, with no amounts outstanding as of September 29, 2024[162]

Starbucks now offers access to delivery powered by DoorDash through its own app.As of Monday (Nov. 11), customers across the United States and Canada (excluding Quebec) can order delivery through the Starbucks app, the company said in a Tuesday (Nov. 12) press release.Starbucks customers can also continue to order delivery through the DoorDash app, as those in a growing number of locations have been able to do since the rollout of that capability began with a pilot program in select markets in 2022, accordi ...

This industry-leading company has been struggling in recent years.Starbucks (SBUX 1.01%) dominates the retail coffee industry, with its massive store base and global presence. Since its initial public offering in 1992, the business has usually been a wildly successful investment. But this hasn't been the case recently, with shares generating a negative 8% total return in the past three years. Adding Starbucks to your portfolio might be something you're considering. Here are three facts about this top restau ...

Shares of Starbucks Corp (NASDAQ:SBUX) are 1.1% lower this morning, following a downgrade to "sell" from "neutral." Specifically, Redburn Atlantic downgraded shares of the coffeehouse chain and lowered its price target from $84 to $77, citing the consensus outlook for the company that does not "adequately reflect" the associated costs. The Wall Street analyst pointed towards Starbucks' recently suspended outlook and the fact that same-store sales, net revenue, and income all declined in the fourth quarter. ...

Core Insights - Starbucks is facing challenges with slumping sales and decreased customer traffic, prompting new CEO Brian Niccol to implement a back-to-basics strategy [2][5] - Former CEO Howard Schultz expressed confidence in Niccol's ability to revitalize the company, while stating he will not return to the CEO role [3][6] Company Strategy - Niccol's strategy aims to restore Starbucks' core identity and enhance customer experience, including the reintroduction of the condiment bar and personalized service with hand-written names on cups [5][6] - The company's Q4 earnings call revealed a 3% decline in revenue compared to the previous year, indicating ongoing struggles to attract customers [5] Leadership Transition - Brian Niccol took over as CEO in September, succeeding Howard Schultz, who has been pivotal in Starbucks' growth from 11 stores to 35,000 locations globally [4] - Schultz, who has served multiple terms as CEO, has stated he will not return to the position, allowing Niccol to lead the company forward [6]

Core Viewpoint - Starbucks is facing challenges in regaining investor confidence after a disappointing fiscal year, despite a brief stock surge following the appointment of Brian Niccol as CEO [1][2][9]. Group 1: Leadership Change and Stock Performance - The announcement of Brian Niccol as the new CEO led to a 24.5% increase in Starbucks' stock price in a single trading session [1]. - However, the stock has remained relatively stagnant over the past few months, with the current price similar to that of four years ago [2]. Group 2: Recent Financial Performance - Starbucks reported weak fourth-quarter fiscal 2024 earnings, including a 2% global sales decline, a 4% decline in comparable transactions, and a 6% decline in non-GAAP earnings per share [11][12]. - Despite strong sales growth, margins have decreased, and earnings have not improved significantly since before the pandemic [11]. Group 3: Strategic Changes Under New Leadership - Niccol's strategies include better staffing to reduce turnover, ensuring adequate staff during peak hours, and adjusting mobile ordering to avoid overwhelming employees [7]. - The company plans to reintroduce condiment coffee bars, simplify the menu, invest in equipment for in-store experience, eliminate non-dairy milk upcharges, and pause price increases through at least fiscal 2025 [7][12]. - Niccol emphasizes the importance of restoring the "third place" concept, aiming to enhance the cafe experience with personal touches and comfortable seating [8]. Group 4: Investment Outlook - While Starbucks is not currently a "screaming buy," it presents a decent investment opportunity with a P/E ratio of 29.3 and a solid dividend yield of 2.5% [14]. - The company has raised its dividend for the 14th consecutive year, indicating a commitment to returning value to shareholders [14]. - Future growth potential is being highlighted, making Starbucks an exciting investment opportunity for those confident in the new strategies [15].

Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Starbucks (SBUX), and highlights the disparity between brokerage recommendations and actual stock performance [1][3]. Summary by Sections Brokerage Recommendations - Starbucks has an average brokerage recommendation (ABR) of 1.98, indicating a consensus between Strong Buy and Buy, based on 30 brokerage firms' recommendations [2]. - Out of the 30 recommendations, 16 are Strong Buy and 1 is Buy, which accounts for 53.3% and 3.3% of all recommendations respectively [2]. Reliability of Recommendations - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often fail to guide investors effectively [3]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell" [4]. Alignment of Interests - The interests of brokerage firms may not align with those of retail investors, leading to a lack of insight into future stock price movements [5]. - It is suggested that investors should use brokerage recommendations to validate their own analyses or utilize more reliable tools like the Zacks Rank [5][6]. Zacks Rank vs. ABR - Zacks Rank is a proprietary stock rating tool that categorizes stocks from Strong Buy to Strong Sell based on earnings estimate revisions, which is a different measure from ABR [7]. - The Zacks Rank is based on quantitative models and is more timely in reflecting changes in earnings estimates compared to the potentially outdated ABR [10]. Current Earnings Estimates for Starbucks - The Zacks Consensus Estimate for Starbucks has declined by 18.7% over the past month to $3.15, indicating growing pessimism among analysts regarding the company's earnings prospects [11]. - This decline in consensus estimates has resulted in a Zacks Rank of 5 (Strong Sell) for Starbucks, suggesting caution despite the Buy-equivalent ABR [12].

Core Insights - Starbucks' mobile app experienced outages on the first day of its holiday menu launch, preventing customers from placing orders [2][4][5] - The app has been a significant growth driver for Starbucks, but it has also created operational challenges for employees due to the volume of mobile orders [3][5][6] - The company acknowledged the outage and stated that it was a temporary issue affecting the order ahead and pay feature, while still serving customers in stores and drive-thrus [4][5] Group 1 - The outage occurred during a peak time for coffee orders, with reports of issues starting around 8 a.m. ET [3] - Customers reported being directed to place orders in-store instead of through the app [3][4] - The holiday menu includes new offerings such as a gingerbread-flavored chai and themed merchandise [4] Group 2 - Starbucks has seen a growth in mobile orders over recent years, but employees have expressed feeling overwhelmed by the volume, especially with customized drinks [5] - The new CEO, Brian Niccol, mentioned plans to implement "guardrails" on mobile orders to simplify the process for baristas [6]