Starbucks is considered one of the most famous in its industry. Securities of the coffee chain are considered a promising asset. Starbucks shares can be bought for both long-term and short-term investments.
Starbucks Corporation is one of the most famous sellers of coffee in the world. The company was founded in 1971. As of October 3, 2021, Starbucks operated more than 16,000 outlets in North America, as well as more than 17,000 international branded and licensed stores.
The founders of Starbucks include Jerry Baldwin, Zev Siegle, and Gordon Bowker, who opened a coffee shop in Seattle in 1971. In 1987 the company was sold to Howard Schultz, who owned the Il Giornale coffee chain. After the purchase, he changed the name of his organization to Starbucks Corporation.
Starbucks stock debuted on the stock exchange in 1992. At the time of the IPO, the chain had 165 stores. Starbucks stock sold for $17 a share at the IPO. SBUX trades at $79 on the NASDAQ exchange in April 2022.
The company's core business is focused on supplying quality coffee beans and beverages. Starbucks acts as both roaster and retailer, strictly controlling every step from the purchase of raw materials to the packaging of the finished product. The company enters into long-term contracts with coffee bean suppliers and supports farms.
Starbucks operates in several directions. The company's products are sold in its own licensed stores. The first option includes mostly Starbucks branded establishments that operate primarily in a store+coffee store format. This line of business brings the coffee retailer about 80% of its revenue. Licensed stores are also managed by Starbucks and are located around the world in high-traffic locations. The company sells coffee, tea, and baked goods in its outlets.
Starbucks management announced plans to increase the number of stores to 55,000. The company plans to reach this goal by 2030. New outlets will open in more than 100 markets. The coffee shops also plan to increase hourly wages for staff by an average of 17% over the next 1.5 years.
Coronavirus rises in China in the spring of 2022. The PRC is considered the second-largest market for Starbucks. Due to the new wave of pandemics, demand for Starbucks products in China has dropped. At the same time, the company is not raising the price of coffee in its stores to increase profits. Starbucks shares are getting cheaper amid falling sales.
The active sale of securities of the coffee chain began after the stoppage of the repurchase of shares. This process at the beginning of April 2022 was suspended by Howard Schultz. He explained such a step by the need to update the equipment of Starbucks facilities and payment of salaries to employees. Schultz returned to running the company in March 2022. At that time, the corporation's employees were actively supporting unionization. Schultz's decision to stop the share buyback was aimed at addressing this problem, which arose amid the outbreak of a new wave of coronavirus in China.
The last report for the fiscal year was published in November 2021. The company's revenues reached $29 billion. Last fiscal year, the corporation ended with net revenues of $4.2 billion. Starbucks had a capitalization of $133 billion at the end of the annual reporting period.
Since the beginning of 2022, Starbucks' stock has slipped 30%. In February of this year, the coffee chain was faced with the need to train new staff and pay employees while the pandemic lasts. In addition to these costs, Starbucks faces supply chain disruptions due to quarantine restrictions.
Starbucks officials are predicting a decline in earnings per share of about 4-6% for the current fiscal year. Previously, the company predicted a decline of less than 4 percent. Sales in China are down 14% instead of the projected 9.3%. Some analysts are confident that the difficult financial situation for Starbucks will end soon.
Starbucks stock was worth $50.05 in March 2020. After the pandemic began through April 2022, the stock price rose more than 60%.
To start investing in Starbucks stock, go to your personal DotBig account and fund your trading account.
During the year (April 2021 to April 2022), SBUX stock has fallen from $117 to $80. The stock peaked above $125 for the year in July 2021.
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In the coffee retail sector, Starbucks' partial competitors are Dunkin' Brands and McDonald's.
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