Starbucks Not Quite Hitting It Out of the Park But New CEO Shows Promise - A King Kohli Perspective

Not My Best Innings But We're Still in the Game

Alright folks let's talk Starbucks. You know even the best of us have off days – like when I get out for a duck (zero) – it happens. This quarter wasn't exactly a six but it wasn't a total collapse either. Revenue was up 2.3% to $8.76 billion but we missed the analysts' mark of $8.82 billion. Adjusted earnings per share were 41 cents short of the expected 49 cents. Not ideal but hey remember what I always say 'Hard work beats talent when talent doesn't work hard.' We're working hard to turn things around.

Knowing When to Take a Single and When to Go for the Big Hit

We all know turnarounds are tough right? Like chasing 350 in the fourth innings on a turning pitch. Earlier in the year we trimmed our Starbucks holdings when the stock was riding high. It was a strategic move like rotating the strike to keep the scoreboard ticking. Now that the stock has cooled off a bit we've started buying back in. You've gotta know when to consolidate and when to attack much like how I pace my innings at the crease. Having utmost confidence in CEO Brian Niccol but expecting few speed bumps is what we did and we are comfortable with our decisions.

EPS? Not the Only Stat That Matters Says Kohli

Apparently the market wasn't too thrilled with the EPS numbers and to be fair who would be? But I get where Niccol is coming from when he says EPS isn't the *only* measure right now. It's like judging a batsman solely on his strike rate when he's building a long innings or saying you can only sledge if you have a century under your belt. Starbucks is investing heavily for long term growth. It's about building a solid foundation not just hitting a few quick boundaries. This may be 'work in progress' but it will all be worth it.

North America: Bouncing Back from a Tricky Wicket

North America wasn't firing on all cylinders that's true. Sales were a bit sluggish and comparable sales dipped 1%. But here's the catch: it's a significant improvement from the previous quarter. Imagine being down 4 0 in a test series but coming back to level it 2 2. It shows resilience right? Transactions were down but the silver lining is the improvement from the last quarter. Niccol is focusing on customer experience and speed aiming for that four minute drink delivery. That's like running quick singles between the wickets – every second counts!

International Play: China Showing Promise Finally!

The international scene is where things get interesting. Sales are up and comparable sales are looking good. Eight of the top 10 international markets are back on track. China which has been a bit of a headache lately is showing signs of life. Revenue is up and comparable sales are flat – breaking a streak of declines. Niccol is committed to China for the long haul tweaking the product offerings to suit the local market. It's like adapting your game to different pitches and conditions – you have to be flexible.

Future Outlook: Buy Rating but a Little Less Aggressive Now

So where do we stand? We're sticking with our 'buy equivalent' rating but we're lowering the price target a bit. Why? Because the economic climate is a bit unpredictable and we might see a slower recovery than expected. It's like adjusting your target score based on the weather conditions and the state of the pitch. Be cautious be aware and most of all be confident. Remember 'You have to start believing in yourself. That's the biggest thing. Self belief.' and we believe!