Starbucks Corp (SBUX)

Allstar13913 (99.88) Submitted: 2/27/07 5:01 PM : Start Price: $30.84 SBUX Score: -27.11

With the recent market downturn, I believe Starbucks is posistioned for a solid run. I love Starbucks, and on the college campus where i live, its always beyond impossible to find a seat.

Also, Starbucks is considered one of the best places to work, offering both their full time and part time employees stock options, vacation days, and health care. Starbucks is much like Costco in that it believes great employees or associates in Starbucks parlance drive a great business.These employees are the core of the SBUX experience.

I have two concerns however, first, I'm afraid of how the market reacts to its reports of comp growth and same store sales. This stock always becomse very volatile right after they are reported, even though the company has always forecasted them to between 3 and 7%, the market is greedy and always wants more.

Second, I recently read Howard Schultz's memo about the watering down of the Starbucks experience, and I was really concerned. People love Starbucks because of its local coffee shop ambience, if it loses that, its no better than Dunkin Donuts or McDonalds. This dilution of the brand is a very serious problem that needs to be remedied quickly.You can read about the memo here:
http://www.fool.com/investing/general/2007/02/26/has-starbucks-lost-its-soul.aspx

and here is a website that reports SBUX news and gossip:

http://www.starbucksgossip.com/

Starbucks is an experience, and without the experience, it becomes just another commodity that people don't need to pay extra for.

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