After Doubling, Does Starbucks Still Have Room to Run?
In spite of economic headwinds -- which may or may not be attributable to an ongoing trade dispute between the U.S. and China -- American companies doing business across the Pacific are proving far more resilient than some expected. Starbucks (NASDAQ: SBUX) is one of them.
After a lackluster multi-year stretch the coffee giant's stock exploded and has doubled in value over the last year. For a company the size of Starbucks (with a market cap currently at $117 billion), that's a massive return in a short period of time. Granted, shares may have been undervalued before the run higher, but there's no reason to worry about the stock suddenly reversing course -- especially if its two most important markets continue to rally.
Starbucks stock jumped again last week after reporting its fiscal 2019 third-quarter earnings, adding to its seemingly already impossible run. The reason? Same-store sales (a combination of foot traffic and average guest ticket size) soared 7% higher in the U.S. and 6% higher in China. Net new store growth in China was also up 16% year-over-year as the company continues to double down on the Middle Kingdom in spite of trade tensions.
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