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FINALLY! - SBUX's New Product Pipeline Revealed

As we have outlined in the past, a key step in the recovery process for SBUX is new product news that broaden the beverage offering at its retail locations!

It appears that the company is now ready to launch a line of smoothie-like drinks made with fresh fruit and whey powder in the U.S. Importantly, this is the first step into of broader line alternative drinks.

Next up new food news!
Stay tuned!

Panera Bread (PNRA) - Wheat trends are as important as Same-Store Sales

All in, a $1 change year-over-year in the cost of wheat per bushel is worth $3.25 million of expense to Panera, or $0.05 in EPS. For 2008, PNRA is fully covered for essentially all their wheat needs at an all-in cost of $14 a bushel.

Currently, wheat is trading at $8.00.

GIL: The Market Does Not Get It (Though CEO Does).

Chamandy sold $147mm in stock in 4Q, just as a multi-year run in margin improvement from accelerated sales growth layered on top of sourcing-driven cost cuts showed signs of cooling. 4 of the top 8 buyers of the stock were Canadian. Average multiple of 22x EBITDA was seemingly rich for an underwear company that is underspending in SG&A. What happens when capacity growth starts to slow in '09, pricing pressure (more WMT exposure) kicks in, GM% erodes, and SG&A growth accelerates to support a new mass-retailer-based business model? We can't imagine that the end result will be anything that could support a 20x+ EBITDA multiple.

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