Starbucks Pauses Share Buybacks: Is It Time to Sell the Stock?
Immediately after becoming the interim CEO of Starbucks (NASDAQ: SBUX), Howard Schultz suspended the company's share-repurchase program. "This decision will allow us to invest more into our people and our stores -- the only way to create long-term value for all stakeholders," he said in a press release.
The ubiquitous coffeehouse giant just posted its best top-line result ever for a fiscal second quarter -- $7.6 billion -- so the decision probably surprised a lot of investors. Despite a mostly positive quarter, Schultz understands that now is not the time for Starbucks to rest on its laurels, especially in an uncertain economic environment.
Rather, the company needs to invest in building a foundation that will allow it to continue to succeed. That this appears to be its strategy is a good reason to be optimistic about the stock.
Source Fool.com
