I'm writing on mobile as my wife shops, so this isn't my full thesis, but wanted to outline my qualitative thoughts on the company.
The company seems to continue to focus on the customer experience, and is offering more menu items, high speed google wifi, clean stores, nice ambiance. People like being in the stores. I'm looking further to see how that translates into profit.
One negative aspect of the customer experience is the amount of time it takes to get through line or the drive through to get coffee, which can be a particular barrier in the mornings (aka throughput). One solution to maximize efficiency (after they also fully saturate the community/market) is technology (mobile ordering, mobile pay, apps, kiosks). I think the company has substantial room to grow in this space and could increase profitability. Incoming CEO Kevin Johnson spent 30 years in technology, including 16 years at Microsoft and 5 years as CEO of Juniper Networks, so I do anticipate a focus on the technology advancements. Could tech for SBUX be what all day breakfast was for MCD?
Growth: the company's 5 year plan calls for 12k new stores, many in China.
Finally, and anecdotally, every time I drive by a store it is packed. My downtown (with stores once every 2-to-3 blocks), my neighborhood, grocery stores, airports, even European train stations... it always seems full of people happily paying $5+ for beans + hot water.
Disclaimer: I own some SBUX and am contemplating quadrupling my position. My entry was around $45.
Disclaimer: I do NOT drink coffee.
Submitted February 26, 2017 at 01:24PM by sdf_cardinal http://ift.tt/2l03UfD
