The stock closed Wednesday (January 2, 2008) at $19.31. Many investors dumped the stock after Bear Stearns & Co. expressed concern that a decline in sales and higher food costs will hurt Starbucks' profitability. (Read the story at Bloomberg.com)
January 02, 2008
the freefall continues. whose gonna be the first ostrich to claim yet again that this is just a normal cycle of ups and downs?
Posted by: jabanga | January 02, 2008 at 05:02 PM
We get it, Jabanga. You hate the bux, and have jumped on the Shadenfreude Express with Pat Nerr and others who will watch any stock slide with glee. I just wish you had something constructive to add, rather than just venting your frustration with your former employer. Some of us still work for the bux, however, and are concerned with where this will leave us.
Posted by: baristajoe | January 02, 2008 at 05:16 PM
Baristajoe,
Keep the faith, we'll ride it out. What all partners need to do now is to strengthen their customer service skills, re-train all partners on key issues such as deployment, service with speed, recertification etc. This is when we as partners in this company need to become stronger more efficient and completely legendary. Don't let the coffee down. We have a great brand, starbucks will get through this. No matter what the naysayers think.
Posted by: Darleen | January 02, 2008 at 05:33 PM
We get it, Jabanga. You hate the bux, and have jumped on the Shadenfreude Express with Pat Nerr and others who will watch any stock slide with glee. I just wish you had something constructive to add,
I don't think that there's anything in that post that says that Jabanga hates Starbucks. There is also nothing in that post that says that Jabanga or anyone else is happy about the slide. Most former partners are still stockholders. Do you really think we want our investment to go into the crapper?
Also, usually the first step of solving a problem is admitting that one exists. So far the company's stance is that everything is fine and there's no reason to worry and that anyone who does worry is the poison in the well that causes the non-existent problem. Until the line changes, I think its perfectly valid to make comments like Jabanga did.
Posted by: ex-sbuxmanager | January 02, 2008 at 06:09 PM
While the slide is troubling, it's not surprising considering that all the major indexes dropped and oil is at $100 a barrel.
While I imagine that some of the continued drop is due to investor's concerns about the direction of the company it also has to do with the fact that the entire economy is slumping and people have less money to spend on Starbuck's products. As the analyst quoted in the article said:
``But it does appear that the business is maturing and investors are adjusting their perception of the shares accordingly,'' Buckley said.
BTW, I don't drink the Kool-aid but at the same time, I don't think it's accurate or fair to tie every decrease in price to decisions made at the executive level.
Posted by: refusnik | January 02, 2008 at 06:23 PM
nice... way to bash Pat Nerr... He doesn't even come here anymore.
Posted by: Anonymous | January 02, 2008 at 06:54 PM
>>>>. way to bash Pat Nerr... He doesn't even come here anymore.
No? He posted on January 1, 2008 at 3:02:45 PM
Posted by: STARBUCKS GOSSIP webmaster | January 02, 2008 at 07:00 PM
I think we all need to take a deep breath and read "It's Not About the Coffee." I believe its the perfect book to realize the innovative spirit of Starbucks and how we can recover the past glory of Starbucks. Let this not be the dark ages of Starbucks but in fact be a new beginning.
Posted by: BOSTON STARBUCKS REBEL | January 02, 2008 at 07:07 PM
``But it does appear that the business is maturing and investors are adjusting their perception of the shares accordingly,'' Buckley said.
That's analyst-speak for: there's no growth potential left in SBUX's massively oversaturated markets, and investors are selling because they see no way to make money on SBUX shares.
Sort of like taking an existing drink and giving it a new (but controversial) name. But no one at SBUX would ever do that.
Posted by: poppy | January 02, 2008 at 07:23 PM
I'm not sure how making light of SBUX stock being in the shitter and leadership being mostly responsible for the poor management of Starbucks is "enjoying in other people's misery"...
I'm glad that we all agree that SBUX situation is pretty miserable...
Posted by: Pat Nerr | January 02, 2008 at 07:47 PM
Greaaaaaaaaat. Well at least that means in Q1 and Q2 our stock buy price for SIP is going to be about $16.20. As soon as the stock comes back to about 22, I'm selling so I can at least break even and get out.
Its always a bad sign when you are LOOSING money on your collective employee stock package. I refuse to loose money on SIP. Ive always sold to make at least some profit or sold before the stock dipped below the buy price. Unfortunately for Q4, I didnt monitor as much, so now I have to wait till it gets back to 22.14 before I sell
Posted by: Vicki Verona | January 02, 2008 at 07:55 PM
"We get it, Jabanga. You hate the bux, and have jumped on the Shadenfreude Express with Pat Nerr and others who will watch any stock slide with glee. I just wish you had something constructive to add, rather than just venting your frustration with your former employer. Some of us still work for the bux, however, and are concerned with where this will leave us."
correction: it is not any stock slide it is one continuous stock slide. on the other hand, you are clearly correct that i do enjoy it. personally, i believe it is the new leaderships just desserts. they deserve it for being the clueless clods that they are. they inherited a great company, initiated all their myopic and petty initiatives and turned it into an extremely mediocre one. as for you, you want something constructive? get out now. its only going to get worse.
Posted by: jabanga | January 02, 2008 at 09:17 PM
Its the martket. Sbux has fallen out of favor, and until the market and economy go up sbux probably wont go up. Does this mean the company, as a whole, is weak? No, we still make crazy amounts of money. My store -- slowest in the area by a large margin -- still makes about half a million a year in profit. From one, slow, store? Every store in the area is busier. Thats a lot of cash cominig in to this company, I don't see them going under.
Posted by: Zipy | January 03, 2008 at 01:28 AM
The company is being run into the ground by morons. At this rate we could be taken over by Pepsi. Something has to change. But will that mean new leadership and vision, or something less comfortable. And on top of the internal problems the economy is in a huge down turn. There is little room for any mistakes. Like SF Mocha, that tastes like pooh! These are some of the reasons the stock has not stopped it decline in almost a year.
Posted by: Bladerunner | January 03, 2008 at 01:34 AM
i'm bailing. i've seen this company sink for as long as i've been with it, and i am not going down with the ship. the stinky burnt-cheese-smelling sugar-coated ship.
anyone else as saddened as i am at seeing music from wilco, radiohead, nirvana, amy winehouse, ryan adams, bob dylan and john lennon being sold at the epitome of corporate conglomerations?
Posted by: chitown's best/angriest barista | January 03, 2008 at 02:08 AM
Yes, because we all know Bear Stearns is the most reliable source for "concern" having just defaulted on $12 billion of loans.
Posted by: Tim | January 03, 2008 at 03:11 AM
"Its the martket. Sbux has fallen out of favor, and until the market and economy go up sbux probably wont go up. Does this mean the company, as a whole, is weak? No, we still make crazy amounts of money. My store -- slowest in the area by a large margin -- still makes about half a million a year in profit. From one, slow, store? Every store in the area is busier. Thats a lot of cash cominig in to this company, I don't see them going under."
Posted by: Zipy
its not the market zipy. is the dow jones down over 50% in the last year? the nasdaq? no one is saying the company is going under. what us "naysayers" are saying is that the company is performing poorly as a result of many, many bad decisions made at the top under the leadership of ceo jim donald. as for your store making a half a million in profit, i believe you have profit mixed up with gross revenue. i can assure you your store does not generate half a million in profit per year.
Posted by: jabanga | January 03, 2008 at 06:23 AM
Jabanga, do you have access to every store's financial data? There are stores that make an average $7,000 per day gross; so it's not entirely unrealistic, once P&L is adjusted for expenses and labour, to say that stores make $500,000 profit in an FY off what would be more than $2.5 million gross.
I worked at one of those stores.
Posted by: Tim | January 03, 2008 at 10:18 AM
tim i beleive he said his store was a slow store. slow stores do not do 2.5 million a a year. stores that gross 2.5 million a year are few and far between.
Posted by: jabanga | January 03, 2008 at 10:42 AM
Sold my stock just before X-mas and boy am I glad!! I am dropping SIP as soon as I can, cuz I do not want to lose another dime.
Posted by: Beantownsbuxbitch | January 03, 2008 at 11:54 AM
my store made $800 last year!!
Posted by: bearista | January 03, 2008 at 01:08 PM
^One word-- IMPOSSIBLE
Posted by: Stacy | January 03, 2008 at 01:19 PM
It has been a nice ride for the past several years, but the time to get off was when the stock was trading in the mid-30's about a year or so ago. At some point the stock was bound to slow down, but SBUX came to a screeching halt, just like Whole Foods. Fortuantely, I have already gotten rid of most of mine...
And I have to agree, it is NOT the market. While the market remains down from the peak last summer, many stocks have recovered and continued to grow. In the meantime, institutional investors are dumping Starbucks like crazy: clearly they no longer see an upside to the stock. I personally think it is going to flounder in the $15-$20 range for awhile.
Posted by: xsbuxdm | January 03, 2008 at 01:48 PM
"no one is saying the company is going under. what us "naysayers" are saying is that the company is performing poorly as a result of many, many bad decisions"
And, as some/many of us are stockholders, we are completely within our right to question what is being done about this.
Posted by: J | January 03, 2008 at 03:14 PM
Remember back to the time when you could walk into a S-Bux and it felt special? Remember when each store had an independent feel to it? The smaller coffee shops could not compete because S-Bux was doing exactly what they were doing only with a better product. Then something changed. The company lost that feeling. The store in Chicago felt the same way that the store in Philly felt. Stores were no longer encouraged to be "individual" or independent. "You all must be the same", came the cry from Seattle. It has gotten so bad that they now tell you what to write on your chalkboards!! Everystore has the same message! Coffeeshops have always been the place where communities gather, you could always tell what the community was like by the vibe of the local S-Bux. Those stores are still out there, but they are few and far between. The company needs to start to encourage that environment again, encourage its' people to bring on that entrepreneurial spirit and drive(how funny, that's one of the guiding principles!)This is a sad chapter in the history of S-Bux, but it can be fixed, they just need to get back to basics. Look at the mission statement and the guiding principles, the answers are right there.
Posted by: Dr. Doppio | January 03, 2008 at 03:51 PM
I get so infuriated sometimes when I come to this site and see what I see...I know a lot of you do as well...I mean, just look at the post above where "Dr Doppio" says "The company needs to start encouraging the environment again"...are you kidding me? The environment doesn't exist because some executive encourages it, the environment exists when WE create it. We are the front line, how can we possible stand here and look behind us, pointing the finger? Don't you realize that our customers observe this? and that it impacts our investor base?
this could be a great forum where we could come up with solutions. We could organize (and no, not unionize, but elevate our voice in a both qualifiable and quantifiable way). We could coach each other. We could hear each other out. And this happens rarely (Darleen you are my only hope some days)
But, instead, those who are disenfranchised almost always have the loudest voice (and post here regularly). I'm not saying that executive leadership has made all of the right calls (trust me I've attended the town hall forums and have voiced my concerns and guess what? I've actually seem policy change as a direct result!), but seriously, I could point our derailer after derailer in each of these threads. It's very clear how to perform well here. How to grow. How to succeed. So many of us have joined hoping that we would work side by side with fellow partners who value the benefits of working here.
The one promising note is that this site is underrepresented from the typical (and most times loyal) Starbucks partner.
One final note- IF you want to make all of the calls, don't want to be told what to put on the coffee board, how to set up your store, which pastries/COW you think should be highlighted, then you really need to consider opening up your own cafe. I think it is incredibly easy to say we aren't allowed enough "entreprenurial" decisions when at the end of the day, you personally won't go bankrupt with the outcome of the decision.
I challenge each and every one of you to attend your next town hall forum in your areas. Put your money where your (invisible) mouth is.
Posted by: | January 03, 2008 at 06:59 PM
Well put..
Posted by: EZ E | January 03, 2008 at 07:46 PM
WOW!!! I wish that I knew your name so that I could THANK YOU! I agree that Darlene is one of the few partners that offers encouragement...Darlene-you are every DM's dream!
I have been a partner for over 10 years, and yes, the stock prices scare me. But, I also believe in Starbucks. I was recently promoted to DM, and not a day goes by that I dont visit at least one of my stores. I truly believe that as a company, we have become too "top heavy"...we have too many partners making work for the stores.
My New Year's Hope is that all partners, regardless of their position should have to work in a store for 4 hours every month. It happened last month month in my district during "Cheer Tours", and I think it should be mandatory!
I truly believe that the stores can make the change! Starbucks is truly a great company, and only we can make a difference...one cup at a time!
Posted by: | January 03, 2008 at 08:01 PM
Fantastic post anon!
Posted by: | January 03, 2008 at 10:10 PM
You're probably right about my numbers being off - but the point remains that most stores make money for the company.
I still believe the stock is out of favor with the market, which isn't unheard of, and because of the weak economy starbucks isn't doing as wonderful as it used to. As such the stock is just the dog of wall street, and nothing but amazing news will revive it -- which probably wont happen until the econ. goes back up.
Posted by: Zipy | January 04, 2008 at 12:07 AM
anon i thought dr.doppio's thoughts were perfectly valid. you say its not corporate's responsibility if store partners fail to create the proper environment yet you also say that people who want to make decisions regarding that environment that they should leave and open their own shots. let me ask you. was it a store partner who made the decision a few years back to trash the third place environment by interrupting the music that is supposed to support the third place environment by playing all those insipid hear music /xm radio promos? was it store partners that decided to replace quality espresso beverages made with a la marzocca to watery sugary mediocrity put out by an inferior machine? are store partners to blame for promo after promo for non-coffee drinks and retail items? if you really believe that partners lack of blind loyalty as demonstrated by grumbling about bad decisions made by leadership on a gossip site on the internet is the cause of the poor stock performance you are seriously deluded. the poor stock performance is a clear reflection of the poor performance by leadership.
Posted by: jabanga | January 04, 2008 at 05:34 AM
it all hinges on tips... Am I right??
just kidding...
As for all of the above... you "nOObs" have half of the story... You are right that YOU need to create the environment every day... that's a no-brainer. And YOU also need to be involved at what's going on in YOUR company. Submitting Mission Reviews... writing to Howard and Jim... pushing your DMs to push back when something erodes the experience. Do you really think that most of the decision makers at the SSC have any idea what the day to day is like? Or how the decisions coming at you might affect YOUR business. C'mon, start participating in the bigger picture if you want it to get better.
On a positive note, this will be good for Starbucks to have such hard financial/operational times... they'll be more focused on the real goal.
Posted by: Pat Nerr | January 04, 2008 at 07:03 AM
Friday morning. Stock at 18.20. Hoping the sip share would pay for this mornings furnace call.(if its not real bad) Guess we're eating out of the Mac and Cheese box for the rest of the month. Stock down 42%+ for year!
Posted by: Bladerunner | January 04, 2008 at 09:22 AM
I'm devastated about all of this. Not only was I was counting on my SIP stock for an eventual downpayment on a house, but Starbucks, a comapany I feel I grew up with and care a lot about, IS undeniably in the shitter. I worked at Starbucks from 2004-2000 and I don't know what the hell has been happening since then. Are partners no longer encouraged to time shots, monitor milk temperature or toss expired coffee. I occasionally order Frappuccinos (I know, I know, I'm losing credibility here) and they are often inconsistant; when the blender is making that high-pitched whirring sound, that means the ice is NOT getting crushed and the frappuccino comes out lumpy. While many lot of customers are self-important snobs, many of us are middle class, splurge on Starbucks and don't deserve a mediocre drink!!! How is consistancy being maintained and rules being followed? Why are my drinks always crappy? I think that THIS explains the stock price slide.
Posted by: Jessica | January 04, 2008 at 02:30 PM
There is more bad news coming...wait and see.
Posted by: | January 04, 2008 at 04:51 PM
that was crytic... why not just tell us that Howard is announcing his retirement rather than make us wonder?
Posted by: anonymous | January 04, 2008 at 05:36 PM
the last time starbucks stock was this low was in may 2004. that means that only a partner hired before may 1, 2003 has any options of even negligible positive value today. that is truly amazing.
Posted by: jabanga | January 04, 2008 at 06:36 PM
So, Jabanga, why are you still here then? What keeps you around?
Posted by: | January 04, 2008 at 07:05 PM
still here as in not dead? or still here as in hanging out at a gossip site? or still here as in working for starbucks? i no longer work at starbucks but i can assure you there are very few posters here who worked longer and harder for starbucks than i did. i thought i was lifer. then my rdo left, my regional vp left, my zone vp left, and finally jim donald was promoted to ceo. the very fabric of the company changed and i was disgusted by most of the changes. i left in early october 2006 and cashed out my options shortly thereafter at its last high of over $40 a share. why am i still here at starbucksgossip.com? because i put my heart and soul into the company and felt very betrayed by the new leadership and what they did to the company i put so much passion into. why do i seemingly enjoy the deterioration of the company i worked so hard to help build? because jim donald deserves it. jim donald deserves failure. the unfortunate thing is that when the board finally does do something about it donald will be protected by some ludicrous golden parachute that starbucks had to give him to get him in the first place. why they wanted him so bad i have no idea. to me, he has all the integrity of a used car salesman. he was a very bad choice as a successor to orin. yes, i do enjoy every day that the performance of the company continues to prove it. coming here is a great and easy way for me to keep tabs on it.
Posted by: jabanga | January 04, 2008 at 08:30 PM
my apologies to any used car salesman who were offended by that post.
Posted by: jabanga | January 04, 2008 at 08:32 PM
Orin had the sense to run a coffee corporation, but not much personality... Jimbo has personality but not much business sense.
Here's a challenge for the Kool-Aid embibers... Name one thing that Jim Donald has done that made an impact on the company...
I'm still around here cuz I owe it to the company... the people that is. Everyone thinks partners should just go away (voluntary or otherwise) and be silent at what they saw or experienced while at Starbucks... The day my boss said "you guys need to separate yourselves from me... I'm a sinking ship" was the day I said "Hell no", this company needs a wake up call.
Too many good people have given up too much to make Starbucks a success to just roll over and take it up the posterior and let leadership continue to rape the partners of their dignity without them even knowing it.
Jabanga... I applaud you. Your artwork kicks ass too.
Posted by: Pat Nerr | January 04, 2008 at 10:22 PM
I agree that Darlene is one of the few partners that offers encouragement...Darlene-you are every DM's dream!
I would just like to say thank you to you and anon for the kind words. I do not have a blind eye as to whats happening within our company, unfortunately we all see these stock drops everyday and it is very disheartening. However, we still do everyday what we set out to do many years ago, one cup at a time. I still value the brand, my partners, my customers. They are what gives me belief in what we're trying to do, to enrich people's daily lives. I can still do that everyday in my store, not too shabby huh? I may not agree with Jabanga or Patt, but they have every right to be here and share their views with us. I'm sure you poured your heart into this company Jabanga, as well as you too Patt. I wish I could say that we are coming back with a vengeance, but only time will tell. I can tell you this, I will still provide the third place envioronment for my customers, a great work environment for my partners, and I will do it with a smile, a cup, and a gratitude for being able to do that everyday.
Posted by: Darleen | January 05, 2008 at 05:17 AM
darleen i appreciate the respect you have always given me. i know the company has still has many many great partners like yourself. i know you have it harder than i ever did because when things were on the right track track we provided the starbucks experience with the full support and servant leadership of our upper management whereas now you have to fight to keep that experience positive despite all the poor decisions at the top. best of luck to you.
Posted by: jabanga | January 05, 2008 at 05:58 AM
Here's a challenge for the Kool-Aid embibers... Name one thing that Jim Donald has done that made an impact on the company...
How about this Patt??
"During his tenure, Starbucks experienced record financial performance, particularly in North America."
I'd say that had an impact.
Posted by: Darleen | January 05, 2008 at 06:01 AM
darleen how does one define "record financial performance"? more sales than last year? when you open 2,000+ stores per year that shouldn't be a problem. maybe if you can provide us with what actual metrics are being used to make this statement we can actually break it down.
Posted by: jabanga | January 05, 2008 at 06:18 AM
Sorry, that was supposed to say "during his tenure as president North America.
Posted by: Darleen | January 05, 2008 at 06:20 AM
Jabanga, I was taking a quote from an article to prove a point. Where would I possibly get access to our financials, lol. What I'm trying to get across is that Jim Donald is a successful businessman. Was he the right successor to Orin? That wasn't my decision to make. I doubt that Howard would put this company in jeopardy knowingly, he trusted Mr. Donald to lead Starbucks, and I'm assuming to get it back on track as well.
Posted by: Darleen | January 05, 2008 at 06:32 AM
Darleen... we haven't had a dialog in months it seems... I miss that.
Yes, Jim was in charge of NA and experienced some success... I'd still argue that he was riding the wave of excitement at being new. He wasn't the leader of NA long enough to really "prove" that though... Yes, he has the skills to run NA I'm sure... but I not sure he has the discipline to run all of Starbucks... coming from NA to CEO of Starbucks is a pretty big leap. Orin was COO of the company before making it to CEO... and he had guys like Behar building International. If anyone should have been put as CEO they should have tried hard to get Behar to do it. I hope you're right that the turnaround is up ahead in '08... The Kool-Aid can only stay sweet for so long.
Just my 2 cents... Happy New Year Darleen.
Posted by: Pat Nerr | January 05, 2008 at 07:28 AM
Darleen... Here's a good source for what your executives do with their "stock"...
http://smartmoney.brand.edgar-online.com/default.aspx?sym=sbux
You'll see all sorts of fun transactions including a couple of amendments to the "Key Employee Stock Program"...
When's the last time your Bean Stock or SIP plans were modified in your favor?
Posted by: Pat Nerr | January 05, 2008 at 07:54 AM
Darleen... we haven't had a dialog in months it seems... I miss that.
I know, it does seem like ages, doesn't it? Happy new Year to you and yours!! I'm just keeping my fingers crossed for a turn around this year. As for my bean stock or SIP, I couldn't even tell you. I'm hanging on to them, I keep telling myself "this too shall pass" I hope all is well for you Patt. Let's keep our dialog going okay? Miss you!
Posted by: Darleen | January 05, 2008 at 05:32 PM