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A Decade Of Schultz: How Starbucks Has Fared Since He Retook The CEO Chair

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A Decade Of Schultz: How Starbucks Has Fared Since He Retook The CEO Chair
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Howard Schultz, the star at Starbucks Corporation (NASDAQ: SBUX), is relinquishing the CEO role yet again. In 2000, Schultz transitioned to the role of chairman in a bid to focus on the coffee chain retailer's global expansion, only to return back to the role on January 6, 2008, as the coffee chain retailer struggled to find its footing.

A Coffee Story Steeped For Decades

The recently planned transition set to take place on April 3 is likely to be smooth, as Schultz passes on the baton to Kevin Johnson, who is already involved in running the business on a daily basis.

Earlier in 1985, Schultz, who joined the company as director of retail operations and marketing in 1982, had left Starbucks altogether due to differences of opinion with the founders over strategy. After leaving Starbucks in 1985, Schultz returned back to it in August 1987 following the founders deciding to sell the Starbucks assets to II Giornale, which Schultz founded on leaving Starbucks. Schultz renamed II Giornale as Starbucks and began to vigorously pursue expansion across the United States.

Benzinga looked at how Starbucks has fared since Schultz took command of the day-to-day operations of the company in his capacity as CEO.

Market Cap(puccino) And More

  • Starbucks' market capitalization has swelled to $81.15 (as of January 26, 2017) billion from $6.98 billion on the day he resumed the role of CEO in early 2008.
  • The company's non-GAAP earnings per share for the fiscal year 2016 (ended October 2, 2016) were $1.91 per share and GAAP earnings were $1.90 per share (on 1.48 billion outstanding share). For the fiscal year ended September 30, 2007, earnings per share were $0.87. Net earnings in fiscal year 2016 came in at $2.82 billion versus $672.6 million in 2007.
  • Revenues for 2016 was $21.32 billion compared to $9.41 billion in 2007.
  • Global comparable store sales rose 5 percent in fiscal year 2016, with a 6 percent increase in the Americas segment, a 3 percent increase in China/Asia Pacific segment and flat EMEA performance. Comparable store sales were 5 percent in 2007 and dipped to -3 percent in fiscal year 2008.
  • Number of stores was at 25,085 across 75 countries in 2016 compared to 15,000 stores in 2007.
  • According to Statista, Starbucks share of the coffee house market was 42.4 percent in 2014.
  • Average analyst recommendation for Starbucks is Buy currently and the average price target is $64.73.

Nothing Non-Fat About This Latte Story

Schultz' turnaround strategy, included, closing underperforming stores, investing in personnel and their training, modernizing operations, reorganizing supply chain, redesigning stores and remaining open-minded to emerging opportunities. The results are for us to see. The current CEO-designate has a tall order before him if he has to emulate the success of his predecessor.

Image Credit: By Creator:Carlo Carrasco (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Latest Ratings for SBUX

DateFirmActionFromTo
Oct 2018Wells FargoMaintainsOutperformOutperform
Oct 2018Bank of AmericaMaintainsBuyBuy
Oct 2018KeyBancInitiates Coverage OnOverweight

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