SBUX – Market expectations are for record-high Uniform ROA, but management has concerns about their initiatives, margins, and Chinese operations

• • • Starbucks Corporation (SBUX:USA)currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 25.8x UAFRS-based P/E. At these levels, the market has bullish expectations for the firm, but management has concerns about initiatives, margins, and their Chinese operations
    • Specifically, management may have concerns about the underperformance of their limited-time holiday offerings in Q1, and may be downplaying concerns about the impacts of their simplification initiatives on comps. Additionally, they may have concerns about declining operating margins, and may be downplaying concerns about their brand equity. Furthermore, they may be exaggerating the success of their Chinese operations, and may lack confidence in the sustainability of Starbucks Rewards member growth