Starbucks

Presented By

Overview

Established in 1971 at Seattle, Washington Famous for its quality fresh-roasted coffee beans and stylish atmosphere. Over 9,000 stores worldwide Product lines include : beverages (coffee, Tazo tea, soda, juices) pastries whole coffee beans coffee-related hardware and equipment merchandise (mug, CDs)

Timeline
1971

Starbucks Coffee, Tea, and Spice store (coffee bean roasting) opened in Seattles Pike Place Market.
Howard Schultz joined Starbucks.

1982 1986 1987

Howard Schultz established Il Giornale Coffee Company.

Il Giornale acquired Starbucks and changed the name into Starbucks Corporation.

1992
1995

Starbucks decertified the union and made IPO.

Starbucks Coffee International opens in Japan Starbucks implemented ESOP.

Timeline

1996 Starbucks began selling bottled Frappuccino. 1999 Starbucks acquired Tazo Tea. 2000 Acquired Hear Music, a San Francisco-based company 2003 Starbucks acquired Seattles Best Coffee 2005 Introduced Starbucks Coffee Liqueur; Acquires Ethos Wate

Net revenue 2011

2011 2010 2009

11.700.400

10.707.400

9.774.600

2011 (mln)
Q1 2950,8 Q2 2785,7 Q3 2932,2 Q4 3031,9

9,3%

Stores
14000 12000

10000 8000
6000 4000 2000 0 Americas CAP EMEA (EU,Middle East and Africa) Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Current Ratio
Current assets/Current liabilities
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2010 2011 Current Ratio

Dividend Per share

The quarterly cash dividend per share of Starbucks
0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 First quarter Second quarter Third quarter Fourth quarter

2010 2011

Financial Net Income Same store sales Earnings per share

Customers Increase core group Support shade growth Sustainability guide

1,000new stores in 2012

Operations New store growth Efficiency Source: coffee beans

Learning & Growth Quality employees More recipes created

SWOT Analysis
Strengths
1. 2. 3. 4. 5. 6. 7. 8.

Weaknesses
1. 2. 3.

Brand name recognition Quality Products Potential Internal Strengths Good Marketing Skills Location Visionary leader Distribution Manufacturing competencies

Non-pioneer in global market Narrow Product line Complicated Products

Opportunities
1. 2. 3. 4.

Threats
1. 2. 3. 4. 5.

Expand into Foreign Markets Widen Product Range Diversify into new Growth Businesses Apply brand name capital in new areas

Change in consumer tastes City regulations Increase in domestic competition Changes in economic factors Downturn in economy

Revenue Estimates

Earning Per Share

Growth Rates

Share Price Forecast

Reasons to be bullish

A strong levered free cash flow of $770 million

A good quarterly revenue growth of 14.7%

Net income soared from $391 million in 2009 to $1.24 billion in 2011.
Sales increased from $9.7 billion in 2009 to $11.7 billion in 2011. Annual EPS from $.87 in 2007 to $1.52 in 2011

Reasons to be bullish

A manageable payout ratio of 42%

It has strong institutional support, % held by institutions is 78% A projected 3-5 year EPS growth rate of 17.7%

Projected growth rates of 21.29% & 25.2% for 2012 and 2013 respectively.

Stock Performance

Stock Performance

Technical Analysis
Current Market price ..52.50 50-Day moving avg.46 100-Day moving avg.39 1stSupport@ 50-51 2nd Support@46-47 1st Resistance@53.56 2nd Resistance@55

Recommendation
Short Term
Sell@53,Stop@54,Target@51 OR Buy@51,Stop@50,Target@53.20

Long Term
Buy@45-46,Stop@42,Target@Open

Thank you!