Starbucks Traders Forced to Give Up Caffeine
We weren’t the only ones who noticed Starbucks traders appeared a little too hyper. Although we normally believe more is more when it comes to data, we can see the logic for cutting off the junkies in this case.
Starbucks to stop issuing monthly sales results | Markets News | Reuters.com
Starbucks Corp. (SBUX.O: Quote, Profile, Research) Chief Financial Officer Michael Casey said on Thursday that the coffee shop chain will stop releasing monthly sales results because the announcements provoked volatility in its share price.
Beginning with fiscal 2007, which started this month, Starbucks will release sales on a quarterly basis, Casey said.
There goes our monthly opportunity to poke fun at our high-strung brethren.
Photo: Starbucks Card for Christmas, originally uploaded by natural gas.
Disclosure: Author owns shares of Starbucks common stock, and has written covered calls to hedge half of the position.
Disclosure: Author is long Starbucks (SBUX) at time of publication.
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[...] We have mixed feelings about the whole quarterly guidance game. It does reinforce short-termism, but shareholders are the company owners and presumably are entitled to know what management expects. The problem is when expectations and reality get out of whack, and the disclosures start doing more harm than good. However, we believe this situation is rare and the presumption should be that more disclosure is better until proven otherwise. [...]
[...] Analysts were expecting $2.3 billion in sales and $0.19 in earnings per share, so we were right about the no surprise. However, shares traded up after market hours. Since we are long the shares, we actually prefer being wrong about the downside risk in this instance. The 4% same store sales number was the weakest link, coming in at the low end of the 3-5% range that was prevailing back when the company used to report monthly. The “tough comparisons” story will be put to the test beginning this quarter. [...]