Friday, July 26, 2019

Green for Show, Analytics for Dough

Being green: I re-use them at home.
Starbucks is often mocked for its responsiveness to the directional changes in progressive winds, but we need to give credit where it's due. We like the redesign of its cold drink lids, all to eliminate the plastic straws that comprise 0.03% of plastic waste.

[Digression: the straw-waste percentage is about the same as the percentage of carbon dioxide (.039%) in the atmosphere. One of the wonders of our time is the belief that the future of life on earth rests on eliminating the last speck of these "dangerous" substances. For perspective, getting rid of plastic straws would be like ordering a 200-pound person to lose 1/16th of a pound.]

(From imgflip)
Anyway, credit to Starbucks for finding a new use for sippy cups.

Mock them all you want, but Starbucks stock is on fire:
The world’s largest coffee chain posted adjusted earnings of 78 cents a share for its fiscal third quarter, a 26% increase compared with a year earlier. Analysts polled by FactSet had expected earnings of 72 cents a share, excluding certain items.

Starbucks’s sales of $6.8 billion were up 8%, also beating expectations. Global same-store sales growth of 6% was the strongest in three years. U.S. same-store sales rose 7%. Cold beverages helped drive growth in the afternoon, the company said, a time when Starbucks has struggled to boost sales...

Starbucks also remains focused on expanding its business in China. Net store growth there was 16% during the quarter, bringing the chain’s total to more than 30,000 locations world-wide.
FWIW, I think much of Starbucks' growth is due to collecting and analyzing data on its customers. The iPhone app knows my food and drink favorites, the stores I go to most frequently, and the promotions that I respond to. Starbucks also knows how often I do a grab-and-go and how long I linger when I use its WiFi.

With privacy all the rage, Starbucks has to downplay the role of data analysis:
Data collected by Starbucks’s digital programs is helping the company better understand what beverages customers want, said Chief Operating Officer Roz Brewer. “We know a lot more about our customers now,” she said.
I agree. I don't think the sippy cups are why the stock has a 30 PE.

SBUX has nearly doubled the past year.

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