What is Starbucks?
The Starbucks Corporation, often referred to simply as Starbucks, is a global coffeehouse chain and one of the world’s most recognised brands. Founded in Seattle, Washington, in 1971, as a single store specialising in high-quality coffee beans and equipment, over the decades Starbucks evolved into a colossal coffee empire, with thousands of locations in over 80 countries, and each of these operating according to the company’s distinctive in-store experience. Starbucks' operations now encompass a diverse range of offerings beyond its iconic brewed coffee, including espresso-based beverages, teas, pastries, and a variety of food items.
Starbucks Corporation is listed on the NASDAQ stock exchange with the ticker symbol “SBUX”.
What affects the SBUX stock price?
The stock price of Starbucks can be influenced by a wide variety of factors, including:
- Starbucks' quarterly and annual earnings reports play a significant role in determining its stock price. If the company's financial results, such as revenue and profit, exceed or fall short of analysts' expectations, it can lead to significant stock price movements.
- The coffee industry is highly competitive, and Starbucks faces competition from both traditional coffee shops and fast-food chains. Market share gains or losses relative to competitors can affect investor sentiment.
- Starbucks relies on commodities like coffee beans, dairy products, and various food items. Fluctuations in the prices of these commodities can affect the company's costs and, in turn, its profitability.
- Starbucks' profitability and stock price may be impacted by shifting consumer trends and preferences, such as a move towards healthy eating or the uptake of new mobile ordering and payment technologies.
- Starbucks' international growth and expansion into new markets can be a significant driver of its stock price. Success or challenges in expanding into new regions can impact investor sentiment.
- Starbucks operates in many countries, which exposes it to currency exchange rate fluctuations. Changes in exchange rates can impact the company's revenue and earnings when translated into U.S. dollars.
- Changes in regulations related to labour, food safety, environmental standards, and taxes can have an impact on Starbucks' operations and financial results.
- Macroeconomic conditions, such as Gross Domestic Product (GDP) growth, unemployment rates, and consumer confidence, can impact Starbucks' sales and profitability. During economic downturns, consumers may cut back on discretionary spending, which could affect Starbucks' business.
- Investor sentiment, news, and analyst reports can also influence Starbucks' stock price. Positive or negative media coverage, analyst recommendations, and social media trends can play a role.
- Major global events, such as the COVID-19 pandemic, can have a significant impact on Starbucks and the entire restaurant industry. Events like these can disrupt operations and change consumer behaviour.
- Changes in interest rates can affect borrowing costs and investment returns, indirectly impacting stock prices across industries.
What to watch out for when trading SBUX stock?
When considering trading SBUX stock, it is important to keep an eye on:
- Starbucks’ corporate earnings results (released quarterly)
- Starbucks’ annual report releases
- Starbucks’ corporate announcements
- News and media stories featuring Starbucks