rlxdoc

Starbucks Turns to Emerging Markets to Recoup U.S. Losses

The Q2 reports don't support your argument. Operating income in the international business was down in Q2 y/y.

More troubling is that international appears to be a low profit, high investment strategy. Domestically last year they ended with $2.2b invested and an operating profit of $1b (15%) for a high forties return on assets. International had $886m invested and $137m in profit (8%) for a mid-teens return on assets. So international is both less profitable and requires more capital per $ of sales than the domestic business.

I like the company. I'd like it better if they faced up to the reality of declining marginal returns and recognized that they are becoming mature. Selling more product to the same customers in the US is going to be a MUCH, MUCH better strategy than investing millions in India and China.