Starbucks (Nasdaq:SBUX) is about to serve up the latest earnings results. See if the barista serves up a Full Fat Latte or if it comes up skinny but supposedly good for you. In the meantime consider this Bear Case Scenario as you listen to management comments. consumer switching costs are minimal, customers change to other specialty coffee chains including Tim Hortons, or McDonald’s or small independents. Labour and commodity costs are volatile. McDonald’s may use robots but can a Starbucks barista become a robot. Or can a robot become a barista. Recent acquisitions will take up too much of management time. Execution risk grows.
George Gutowski writes from a caveat emptor perspective.