Coffee giant Starbucks (SBUX) recently rolled out its fall drink line, and based on the numbers returned, it was not a moment too soon. In fact, Starbucks posted what it calls its “best-ever sales week” throughout the United States. But despite this, Starbucks investors did not stick around for the encore and pulled out, sending shares down fractionally in Tuesday afternoon’s trading.
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CEO Brian Niccol sent a message to employees marking the Labor Day holiday, thanking them for the incredible sales week. In fact, Tuesday proved to be the best day, with the menu going live that day. People flocked in for their pumpkin spice fix, as well as a slew of other drinks that had been unavailable for months.
Oddly, Niccol did not reveal any specific sales numbers or other metrics as part of the message to employees. This makes one wonder just how the sales actually turned out; the “best-ever” week might have been a narrow win, which is a bit disconcerting given the return of pumpkin spice. Maybe more potential customers were devastated by the loss of apple crisp than previously indicated.
The Unions Are Knocking
With Brian Niccol talking about Starbucks’ best week ever, this is giving the Starbucks unionization movement some fresh fodder. Recently, Starbucks Workers United—the union representing some Starbucks locations—hit its 600th shop organized. The efforts are continuing, reports note, and big sales, along with big CEO paychecks, are giving them a little extra life.
A lot of that growth is recent as well, with some reports suggesting one or two new stores every week. While that pace is impressive, it still represents a large portion of Starbucks locations that are as yet unaffiliated. Starbucks’ new plan, the Back to Starbucks initiative, is also weighing heavily on baristas as it depends so heavily on them to make the plan work. This might also give union organizers a new point to press to advance the union cause.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, eight Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 5.36% loss in its share price over the past year, the average SBUX price target of $100.68 per share implies 14.32% upside potential.
