December 20, 2017

SBUX – Market expectations are for record-high Uniform ROA, but management has concerns about revenues, margins, and membership growth


  • Starbucks Corporation (SBUX:USA)¬†currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 28.3x UAFRS-based P/E. At these levels, the market has bullish expectations for the firm, while management has concerns about revenues, margins, and membership growth
  • Specifically, management appears concerned about the sustainability of revenue growth in their CAP region, and may lack confidence in their ability to drive margin expansion in their EMEA segment. They also appear concerned about the sustainability of membership growth

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