Starbucks CEO sounds a bullish note

Posted Oct 30th 2008 11:51AM by Zac Bissonnette
Filed under: Good news, Starbucks (SBUX)

Speaking to reporters during an employee conference in New Orlenas, Starbucks (NASDAQ: SBUX) CEO Howard Schultz said (subscription required) that the company "did see a slight improvement in the first few weeks" of the fourth quarter in terms of the average number of transactions per store, "which might suggest that Starbucks has hit bottom."

With the once high-flying growth stock trading at less than one-third of the highs it reached in 2006, that's good news for investors. In the current economic environment, "slight improvement" translates as "incredible news!"

The question is whether the modest signs of a turnaround are coming at the expense of margins, or in a more long-term sense, the company's status as a premium brand. The company has recently begun selling gift cards at Costco (NASDAQ: COST) for a 20% discount.

Still, the fact that the company is making modest progress in its turnaround efforts at a time when nearly every restaurant is struggling, bodes well for the company's future once consumer spending ticks up again.

Tags: inthenews, SBUX, schultz, Starbucks

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Reader Comments (Page 1 of 1)

10-30-2008 @ 11:57AM

andy abraham said...

We spoke about Starbucks on Myinvestorsplace.com during the recent down turn of Starbucks... it seemed so simple... every corner had a Starbucks...they cannabalized themselves... Are we wrong?

Andy
www.myinvestorsplace.com