Starbucks' announcement yesterday to acquire substantially all of the assets from Coffee Vision, Inc. and Coffee Vision Atlantic, Inc., its licensee in Quebec and Atlantic Canada and transition 40 licensed locations to company-operated locations fits into the company's plan to accelerate its international unit exposure. Along with the 40 stores, the company is gaining full development and operation rights for retail stores in these two provinces. Going forward, the company plans to open more stores internationally than in the U.S. (about 3,500 stores internationally versus less than 1,200 stores in the U.S. over the next three years). The company is guiding to $800 million in capital spending in FY09, which is line with what the company spent in the U.S. alone in FY07 (which was a huge problem from a ROIIC standpoint), so as more of the company's growth capital expenditures are allocated to its international business, we should see returns improve dramatically.
Also, insiders must see good value at these levels. I always view it as a positive when I see insiders buying stock because they are obviously closer to the story than I am. Yesterday, one of Starbucks' directors bought 2,300 shares at $17.26.