How Can Competition With Luckin Coffee Affect Starbucks’ Valuation? – Forbes

How Can Competition With Luckin Coffee Affect Starbucks’ Valuation? – Forbes

Starbucks
This Dec. 13, 2018, file photo shows a sign for a Starbucks Coffee shop in Harvard Square in Cambridge, Mass.
(AP Photo/Charles Krupa, File) photocredit: ASSOCIATED PRESSStarbucks (NASDAQ: SBUX) recently reported its Quarter 1 results (ended December 2018) for the Financial Year 2019. The company beat the consensus in revenues and earnings and posted $6.6 billion and $0.61, respectively. The total revenue is up by 9% year on year and comparable sales are up by 4% globally driven by 3% in average ticket size. China’s comparable sales are up 1% YOY but the Total stores are up by 18% YOY. .


The company opened 541 net new stores.
Of those, over two-thirds are outside the US and about 50% are licensed stores. This takes the Total Store count to 29, 865 at the end of December 2018.We maintain our $66 price estimate for Starbucks. In our interactive dashboard How Will Starbucks Valuation Be Affected If Average Store Sales In China Fall By 10% in FY 2019 we provide a scenario in which we estimate Starbucks’ Share Price in a situation where the average store sales falls by 10% due to recent competition from the domestic brands like Luckin Coffee. In addition, here is more Consumer Discretionary data.Luckin Coffee has emerged as a very strong competitor to Starbucks in China. .

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