1) Howard Schultz, Chairman of Starbucks, talked about competition from McDonald and Dokin Donuts.
Starbucks is not an advertiser. If other companies are going to advertise and promote specialty coffee, Starbucks is going to benefit in the long term,” he said.
2) iPhone price cut and iPod touch launch: Steve Jobs announced Apple will cut 8GB iPhone from $599 to $399, discountine to offer 4GB iPhone, and offer an iPod touch, which is “an iPhone without phone capability”. In other words: iPod touch will have touch screen, music and video capability, WiFi, Internet, etc. You can check out latest iPod lineup from apple.com
That’s the new services to be offered by two great companies: Apple and Starbucks. According Seattle Post Intelligence:
Apple’s new wireless iPod music player, iPhone or any laptop computer running iTunes will automatically recognize the iTunes store without a connection fee when customers enter a Starbucks shop that has Wi-Fi access.
I read its earning report this morning (Shanghai is 12 hrs ahead of US EDT). They reported an inline quarter. In the past that could send the stock tank. Not this time, because the stock has been down 27% since Jan 1. The expectation is already very low. With a PE about 33, and revenue growth of 20%, and a superior brand, I believe its future in the long term.
Let me talk things beyond the earnings. In the Cloud 9 (shopping mall and office building, where I work these days) there are 2 Starbucks stores. Around Zhongshan park I’m aware of 4 stores total.
According to “Shanghai Metro” newspaper yesterday, Coca cola is the No. 1 brand in the world, it brand is est. valued at $65 b (I believe its market cap is more than $100 b). Starbucks is not on the top 10, but could it fetch $ 6.5 b? Note SBUX has a market cap of about $20 b lately.
1) StrengthTrader listed the greatest investors of all time (in Chinese). Among them I am familar with Buffett, Fisher and Lynch. I think Bill Miller is the Peter Lynch in current Mutual Fund world.
2) Alibaba is hiring, they are adding 2,000 people by the end of 2007. Meanwhile, Ali’s little bro Ninetowns is shrinking, they are laying off people after recent acquisition.
3) Save $10 off Crocs through CrocFans.com.
4) Investor Trip Starbucks experience. My comment: it’s about experience, not just about coffee (i.e., coffee buyers at McDonald and Dunkin Donuts are different groups).
5) Sun’s Financial Diary’s “Pay ourselves first”. I remember seeing one of the guest on CNBC “Millionare Inside” said similar things. Well, Sun has made significant progress on this aspect too. Very good job.
But the controversy is not over. Here is a Chinese article talking about the “culture misunderstanding between China and the west”. On a related matter, people are wondering those “American Express” sponsored boards (in English) should remain.
in Japan. I read this news from MSN that McDonald is going to open McCafe stores in Japan. Quote the news:
“The Japan unit of U.S.-based McDonald’s Corp. will launch 15 pilot “McCafe” stores in the Tokyo area on August 29, according to a company release. The stores, the burger chain’s first foray into the coffee shop business, will offer low-priced beverages to lure more families, the release said. McDonald’s said it will consider opening McCafes across Japan in the next fiscal year.
The cafe business in Japan has been shrinking and stood at 1.052 trillion yen ($8.61 billion) in 2006, down 5 percent from the previous year. Still, sales at specialty coffee shops like Starbucks have soared. The Seattle-based coffee chain, which first opened a store in Japan in 1997, has almost 700 stores across the country and saw sales jump 16 percent last year to 78.9 billion yen ($646 million).”
People who bought the Blackstone (BX) at its IPO debut (around 35), will regret “chasing hot stocks” now. I don’t know how the Chinese State Investment Co. (who took 8% stake at around $3 b) felt about this. Oh well, they are in this for long haul.
Crocs stock (CROX) got a hit today. Barrons ran an article on weekend reminding people taking some profit now, I did it on Monday. But I’m still bullish on the company’s business, especially interntional front: hope people don’t just buy knockoffs?
The stock got another hit today as its CFO says that: meeting the high end of the coffee shop chain’s 2007 earnings forecast will be “very challenging” due to rising dairy costs and slowing sales growth in its U.S. business,…
It seems high gas prices are really hurting them, in two ways. Some customers have to choose between a $4 latte between $3 gas, you can read this Dallas Monring News article if you are into the details. From cost side, the rising diary cost was passed on from higher corn (think ethanol) price. Also, keep in mind, the capital expenditure of new stores opened recently will take some time to bring returns. So, you can say they are facing a head wind. Wallstreet gave up on them because its growth has clearly slowed down in the US.
Mop is less cool (pacific epoch): Mop, the Chinese teen social networking web sites, became less cool because it did not turn on the Air Condition to save utility cost. Separately, Mop’s parent Co., Oak Pacific, is not going IPO very soon.
Starbucks to offer salad (Starbucks Gossip): so that they can offer a one stop shop for lunch customer? In doing so they are dumping Jones Soda from fridge. Sorry, go to Panera (St. Louis) Bread Co. if you still want Jones Soda.
Went to a newly opened Starbucks at Olive and Price yesterday. This is a very nice place, compared to the one at Olive and Craig (much older). The traffic there was OK consider this was Sunday morning.
A lot things are against Starbucks business lately, according to a guest at CNBC this morning.