Group 1: Market Overview - Rising coffee prices have negatively impacted the stock prices of Starbucks and Dutch Bros, with Starbucks down over 4% and Dutch Bros down over 12% in the last 30 days [1][2] - Concerns about tariffs and a potential recession are leading investors to question the valuation of these stocks [2] Group 2: Company Profiles - Starbucks is a market leader with nearly 17,000 stores in the U.S. and generated $3.10 in earnings per share on $36.1 billion in revenue in 2024, both lower year-over-year [3][2] - Dutch Bros, a newer entrant with a devoted customer base, opened its 1,000th location in February 2025 and has seen significant stock performance, up 92.6% in the last 12 months [5][6] Group 3: Coffee Price Dynamics - Arabica coffee prices have surged over 70% since November 2024, reaching levels not seen since 1977 [7] - The increase in coffee prices is influenced by the threat of tariffs and adverse weather conditions in coffee-producing countries, particularly Brazil [8][9] Group 4: Sourcing and Supply Chain - Dutch Bros sources its coffee primarily from Brazil, Colombia, and El Salvador, making it vulnerable to supply chain disruptions [9] - Starbucks sources coffee from over 30 countries and buys approximately 3% of the world's total coffee supply, which exposes it to pricing pressures despite geographic diversity [10] Group 5: Valuation and Investment Considerations - Both stocks are trading at premium valuations, with Dutch Bros at over 111x forward earnings and Starbucks at 35x forward earnings [12] - Investors are paying a premium for growth, and a move below the 200-day moving average could present a buying opportunity for Dutch Bros [13]

Group 1 - Starbucks Corp (NASDAQ:SBUX) shares have retraced from their 52-week high to key support at the 50-day moving average, indicating a potential rebound opportunity for SBUX calls [2] - The stock's recent pullback occurred after a gap higher following the earnings report on January 28, with Friday's low remaining above the initial post-earnings reaction level [2] - Options positioning shows a shift in sentiment, with increased put activity as shares tested a key support level, suggesting a cautious outlook among traders [3] Group 2 - Analysts maintain a cautious stance on SBUX despite its strong earnings performance and outperformance against the S&P 500 Index in 2025, with 15 "hold" and 5 "sell" ratings [4] - Short interest in SBUX is at a record high, requiring more than three days' worth of volume to cover, which could lead to a short squeeze if momentum returns [4] - The recommended call option has a leverage ratio of 6.62, indicating that a 14.84% increase in the underlying shares would double the option's value [4]

Core Viewpoint - Starbucks CEO Brian Niccol emphasized the company's commitment to diversity as a fundamental strength, stating that it is essential for connecting with customers globally [1][3]. Group 1: Company Strategy - Niccol introduced a "Back to Starbucks" strategy aimed at returning the company to its coffee house roots to increase store traffic [2]. - The company operates 40,000 stores across 88 markets, highlighting the importance of reflecting the diversity of its customers and staff in every location [3]. Group 2: Commitment to Diversity - Chief Partner Officer Sarah Kelly reiterated the company's deep commitment to diversity and inclusion, ensuring that every partner and customer feels a sense of belonging [4]. - Niccol mentioned the focus on enhancing the board's diversity to ensure effective oversight and success of the business [5]. Group 3: Industry Context - The comments come amid a trend where major corporations are scaling back on diversity, equity, and inclusion (DEI) initiatives, facing pressure from various sectors, including political figures [6][8]. - Companies like Target, Amazon, and Walmart have recently pulled back on their DEI programs, indicating a broader industry shift [8].

Core Insights - The article discusses the expertise of a specialized equity analyst in the restaurant sector, focusing on various dining segments in the U.S. market [1] Company Analysis - The company, Goulart's Restaurant Stocks, is dedicated to analyzing restaurant stocks across multiple segments, including QSR, fast casual, casual dining, fine dining, and family dining [1] - Advanced analytical models and specialized valuation techniques are employed to provide detailed insights and actionable strategies for investors [1] Industry Engagement - The analyst actively participates in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] - Previous contributions include columns on monetary policy, financial education, and financial modeling aimed at making these subjects accessible to a broader audience [1]

Core Insights - A report indicates that Starbucks Coffee Trading Company (SCTC), a subsidiary in Switzerland, has significantly influenced Starbucks' tax payments over the past decade, helping to shift approximately $1.3 billion in profits to lower-tax jurisdictions since 2015 [2][10] - The report highlights a contrast between Starbucks' public image of social responsibility and its use of tax strategies that exploit loopholes [3][10] Tax Strategy and Financial Practices - SCTC is responsible for sourcing unroasted coffee and has been used to book the costs of these beans, which do not physically pass through Switzerland, allowing Starbucks to mark up prices significantly [4][5] - The markup on coffee beans increased from about 3% between 2005 and 2010 to 18% between 2011 and 2014, contributing to the profit shift [4] - The average tax rate for US companies in Switzerland is reported to be 3.9%, compared to the US corporate tax rate of 21%, indicating a substantial tax advantage [6] Dividends and Profit Allocation - SCTC has reportedly paid between $125 million and $150 million in dividends annually to another subsidiary, Starbucks Coffee EMEA B.V., with these payments not being taxed upon leaving Switzerland or entering the Netherlands [7] - The report analyzed financial filings of Starbucks subsidiaries across Europe to trace profits booked at SCTC [7] Company Response and Industry Context - Starbucks responded to the report by asserting that it pays appropriate taxes in all jurisdictions and that the report misrepresents its business model [8] - The use of offshore tax strategies is not unique to Starbucks, as many large companies utilize tax havens to minimize tax obligations, a practice that has been ongoing for decades [11][12]

Core Viewpoint - Starbucks is facing challenges in growth despite its strong brand and recent leadership changes, with concerns about its stock valuation amidst ongoing economic uncertainties [1][4][7]. Group 1: Company Performance - Starbucks has experienced a slowdown in growth, with negative same-store sales for four consecutive quarters, indicating struggles in generating revenue from existing locations [3][4]. - The company appointed CEO Brian Niccol from Chipotle Mexican Grill to help turn around its business, but the effectiveness of these efforts is still uncertain [2][4]. - Recent earnings reports show that overall growth rates have not been impressive, raising concerns among investors [3][4]. Group 2: Stock Valuation - The stock has rallied over 20% in the past six months, reaching a 52-week high of $117.46, but this increase may have led to an overvaluation given the company's current challenges [2][5]. - Investors are currently paying 37 times the trailing earnings for Starbucks stock, which is considered expensive for a company struggling to generate growth [5][6]. - There is a perception that the stock may be priced with too much optimism, as the company has not demonstrated a clear path to revenue growth that justifies its high valuation [7][8].

Starbucks CEO Brian Niccol implored employees during an internal forum to make decisions more efficiently and to take ownership of them, reiterating his commitment to drastically improve operations in order to attract more customers back into stores. "We’re not effective on how things get to the store, and we’re not effective in making decisions and then holding each other accountable to those decisions," Niccol said during the forum. "This is why we had to make the changes that we had to make."Since taking ...

Starbucks Corp. has appointed Cathy Smith as the company’s chief financial officer and executive vice president, the coffee chain announced in a filing Tuesday.The company said that Smith is joining Starbucks SBUX from Nordstrom Inc. JWN, where she has served as chief financial officer, executive vice president and treasurer since 2023. Smith has previously served as CFO of Bright Health Group, Target Corp. TGT, Express Scripts, Walmart Inc.’s WMT international division, GameStop Corp. GME, Centex, Kennamet ...

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Starbucks announced Tuesday that Nordstrom CFO Cathy Smith will join the company as its new chief financial officer, replacing longtime veteran Rachel Ruggeri.The executive change is the latest for Starbucks after Brian Niccol joined the company as chief executive in September with the goal of turning around slumping coffee sales.So far, noteworthy departures during Niccol's tenure have included the company's North American CEO, North American president, chief supply officer and the former chair of the boar ...