Long-time investors in Starbucks (NASDAQ: SBUX) have not had a great ride over the past 24 months, in which the stock tumbled to a several-year low, hitting bottom in November 2008 at $7.06. It's a far cry from the growth stock dreams of 2006, where the stock regularly scored in the upper $30s. Today's close, $14.69, is more than double that day in November; but still many investors are likely below water. And while the third quarter 2009 results won't push the stock back toward its 2006 highs, at the very least, it's cracking $16 in after-hours trading.After the bell today, Starbucks surprised with non-GAAP earnings came in at 24 cents a share after one-time charges associated with store closings, or $151.5 million. Analysts' consensus had been earnings of 19 cents a share. These results are compared to 16 cents a share in Q3 2008. Starbucks registered revenue of $2.4 billion, compared to $2.6 billion in Q3 2008 and $2.3 billion in Q2 of this year. Comparable store sales were down 5% between Q3 2008 and 2009, which Starbucks says was an improvement over Q2 2009, with a nine percent same-store sales decline.
I wrote at length on DailyFinance about Starbucks' third quarter 2009 events and hopes for the future. While analysts seem to be focused on same-store sales and when they'll turn positive (management won't say), my judgment is that it's far more important that Starbucks find a way to connect with consumers' changing desires. Slowly, Americans are losing their brand loyalty and turning more toward authentic, personal experiences; this new experimental series of locally-branded not-Starbucks is a great attempt at capitalizing on that. Whether Starbucks can maintain this focus on consumers' trending desires will determine whether the company's next several quarters continue to reverse its losing trend.
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