Starbucks

Appendix

1…………………………………………………………………………………………Cover
2…………………………………………………………………………………………Appendix
3……………………………………………………………..……………Company Description
5…………………………………………………………………………...………Key Statistics
6…………………………………………………………..……………Intrinsic Value Analysis
6……………………………………………………….……………….Multiple Analysis
…………………………………………………………………Asset-based Valuation
………………………………………………………………Dividend Discount Model
…………………………………………………..………Discounted Cash Flow Model
………………………………………………………………Retained Earnings Model
……………………………………………………………………………AEG Model
………………………………………………………………………Important Financial Ratios
…………………………………………………………………………………………Conclusion
…………………………………………………………………………………………References
Company Description Starbucks Corporation (SBUX) is a company specializing in the “coffeehouse experience”. Starbucks is named after the first mate in Herman Melville’s Moby Dick. The logo is also inspired by the sea – featuring a twin-tailed siren from Greek mythology. After being founded in 1971 as a single store in Seattle’s historic Pike Place Market, in 1987, Howard Schultz (Starbucks chairman, president and chief executive officer) purchased Starbucks with the help of local investors to complete one mission—to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time. Starbuck’s corporate offices and headquarters are located in Seattle, Washington. They have now turned that single storefront into more than 19,000 stores in over 60 countries, becoming the premier roaster and retailer of specialty coffee in the world. Starbucks was incorporated under the laws of the State of Washington, in Olympia, Washington, on Nov. 4, 1985, and later went public on June 26, 1992 at a price of $17 per share (or $0.53 per share, adjusted for subsequent stock splits) and closed trading that first day at $21.50 per share.
In addition to over 30 blends and single-origin premium coffees, Starbucks completes the “coffeehouse experience” by supplying a selection of

References: Company Description Starbucks Corporation (SBUX) is a company specializing in the “coffeehouse experience”. Starbucks is named after the first mate in Herman Melville’s Moby Dick. The logo is also inspired by the sea – featuring a twin-tailed siren from Greek mythology. After being founded in 1971 as a single store in Seattle’s historic Pike Place Market, in 1987, Howard Schultz (Starbucks chairman, president and chief executive officer) purchased Starbucks with the help of local investors to complete one mission—to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time. Starbuck’s corporate offices and headquarters are located in Seattle, Washington. They have now turned that single storefront into more than 19,000 stores in over 60 countries, becoming the premier roaster and retailer of specialty coffee in the world. Starbucks was incorporated under the laws of the State of Washington, in Olympia, Washington, on Nov. 4, 1985, and later went public on June 26, 1992 at a price of $17 per share (or $0.53 per share, adjusted for subsequent stock splits) and closed trading that first day at $21.50 per share. In addition to over 30 blends and single-origin premium coffees, Starbucks completes the “coffeehouse experience” by supplying a selection of premium Tazo® teas, fine pastries, smoothies, sandwiches, as well as other items. They also make available consumer products including Whole bean and ground coffee (Starbucks and Seattle’s Best Coffee brands), Starbucks VIA® Ready Brew, Starbucks® K-Cup® portion packs, Starbucks® and Teavanna® Verismo™ pods, Tazo® tea filterbags, and tea latte concentrates, Starbucks® bottled Frappuccino® coffee drinks, Starbucks Discoveries® chilled cup coffees, Starbucks Discoveries® Iced Café Favorites™, Starbucks Iced Coffee, Starbucks Doubleshot® espresso drinks, Starbucks Doubleshot® Energy+Coffee drinks; Starbucks Refreshers™ beverages, Evolution Fresh bottled juices, Tazo® bottled iced and juiced teas. Some familiar bands in the brand portfolio of Starbucks include Starbucks Coffee, Seattle’s Best Coffee, Teavana, Tazo, Evolution Fresh, La Boulange and Torrefazione Italia Coffee. Starbucks has established Coffee and Farmer Equity (C.A.F.E.) Practices, a comprehensive coffee-buying program that ensures coffee quality while promoting social, economic and environmental standards. This means that Starbucks outsources their coffee beans and roasts them once they’ve been harvested themselves. However, recently Starbucks bought its first 600-acre property with intentions to study and develop hybridization and different processing techniques. This purchase was made amid growing concern about a fungus in Latin American that has resulted in lower projections of coffee production in the next growing season. Starbucks has partnered with Conservation International in order to develop criteria for growing coffee in socially, environmentally, and economically responsible ways. Main competitors of Starbucks Corporation include companies like Dunkin ' Brands Group Inc. (DNKN), McDonald’s Corporation (MCD), and Keurig Green Mountain Inc. (GMCR). Dunkin’ Donuts is one of the companies most similar to Starbucks due to their being a market leader in the hot regular/decaf/flavored coffee, iced coffee, donut, bagel and muffin categories. Dunkin’ Brands Group Inc. also owns Baskin Robbins. Other companies such as McDonald’s Corporation and Keurig Green Mountain Inc. are main competitors of Starbucks, but McDonald’s operates as a fast food company but is considered a large contributor to the coffee industry. Keurig Green Mountain Inc. is considered a competitor as well, though they sell their products through the internet and other storefronts rather than through company owned stores. When Starbucks is being valued in relation to its competitors, Dunkin’ Brands Group is the best comparable which will be discussed later in the report. Most recently, Starbucks released its first-quarter earnings on January 23, 2014. As the company showed growth in global comparable store sales by a 4% increase in traffic, while strong holiday sales and store traffic drove 12% revenue growth to a record $4.2 billion (although this number was lower than analysts’ predictions of $4.29 billion). The earnings report also included growth in earnings per share by 25% to a record $0.71. Currently, the stock price is trading at around $68, but has great potential to grow. Starbucks is also currently in the midst of planning 1,500 new stores globally.