Starbucks Has Returned To Earth, But It's Still Not A Good Buy
Summary
- We have consistently held a negative outlook on Starbucks, unimpressed with Brian Niccol's "Back to Starbucks" strategy, viewing it more as a marketing meme than a substantive strategy.
- Our previous article, "It's A Great Time To Short Starbucks," highlighted our skepticism and suggested a bearish stance on the stock. To our chagrin, the stock popped, but has since fallen.
- Starbucks had 29.8 million shares available for repurchase as of 2025 Q1 that ended on December 28th. Were we advising SBUX, we would have them deploy cash with a share buyback.
- Such a buyback would, all things being equal, improve financial ratios, most prominently to increase the EPS, but also to reduce the P/E ratio.
- We reiterate our view that only an audacious, visionary, reimagining of Starbucks will restore its good fortunes. Brian Niccol is not the leader to do that.
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