Takeaway: "SBUX is rethinking everything." Longer-term, it's a net positive, short-term it will be expensive, suggesting estimates need to come down.

Editor's Note: Below is a brief excerpt from a complimentary research note written by our Consumables analysts Howard Penney and Daniel BiolsiCheck out our Sector Pro Product Consumables Pro

What Big Changes Spell For $SBUX Future - 2022 09 01 10 10 16

WSJ"SBUX is rethinking everything." Stories like this about SBUX are planted in the WSJ by the SBUX PR/Media team to prepare investors for big changes are coming for the company.  Longer-term, it's a net positive, short-term it will be expensive, suggesting that estimates need to come down.  

When I read this story in The WSJ, the first thing I thought was the company is sending up smoke signals that fixing the company will be expensive and a multi-year process. 

There are big changes coming to the company, and management does not want people to be surprised at the upcoming analyst meeting.  Yes, they are doing this from a position of strength, but they also need to slow the spread of unionization, and improving working conditions for employees is part of that plan.  

The article says, "U.S. stores designed a decade ago struggle to meet today’s consumer demand. Cafes that once averaged 1,200 orders a day are now trying to make 1,500. Executives recently visited one East Coast cafe that averaged $1 million in annual sales a decade ago.

Now, it is ringing up nearly $3 million in sales in the same 1,500-square-foot space. Many U.S. locations need to be overhauled, said Katie Young, who as senior vice president of global growth and development is in charge of figuring out what new cafes should look like. Having so much demand is a privilege for Starbucks, but also a problem, she said." 

The quote from the person in charge of what the cafe should look like suggest the company cooperated with this article. 

Including the images of a time and motion study by the company. If the company looks at how employees move around the store, big changes are coming.   

What Big Changes Spell For $SBUX Future - bnn