Starbucks are doing worse than us!
hajaj.yossi
Posts
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Good report beating expectations, resumed buyback and continue the 10 cents dividend. Provisions for bad debt were very high once this improves annual earning power is 2.0$ per share.
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Low trading volumes only sellers… buyers waiting for the ER.
It will jump soon with extremely high volumes. -
ER not today…
The good thing is that we do see a shift in short term options trading with more CALL options opened for ST trading.
ER tomorrow or max Thursday. We will see improved GM. Q1 sales are seasonally lower (~300 million) so no big expectation there.
If they keep the annual guidance at 1.6-1.7B$ with good GM it will explode! -
Do a DCF for the next 10 years and say the price war continuous for another 3,6 or even 12 months and then we are back to normal profitability and growth this transition period is not too significant.
The market is not thinking like that and today we will go down 10% or so. -
By the way zero EBIT (non GAAP) is not bad but the potential is 20%++ and the price war will not bring any value. It is just EGO!
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When you give discounts of over 20% your same store sales will drop accordingly.
I think it is a huge mistake to participate in the price war. They can stop it any time they want maybe the growth will be lower but the profitability and the brand will become stronger.
As it seems Starbucks is not taking part in the price war. -
Price war is in full force. Negative EBIT of 1%. This company can easily make 20% EBIT with regular prices.
How long this war will continue?
As long as it does, the numbers will be similar.t is also killing the top line by at lease 20%!
I am not selling but it will be a bloodshed today. -
50% they will report today.
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ER not today. Either Tuesday, Wednesday or Thursday. Friday is holiday for the Saudis.
They will also report Q1 sales which end on May 4th… so they will have 98% of the actual sales.
More important is the GM and whether now with lower cotton and freight the can return to the high 30’s. If they do it is a new ballgame. -
After the bought the 54% holdings, the Saudis decided to infuse $78 million loan and then another $90 million in LT loans. They have access to much more information than we have. They are not stupid. We will learn more next week when issue the ER.
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New TTM high is coming after ER.
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When the Bank will announce?
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Not today… next week it will be released. They can announce by Friday May 3rd.
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Maybe the deal is not going to happen?
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Updated availability will be more than $100 million which is more than sufficient to support the business by 2025.
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The bank took advantage on the technical default due to the change in ownership… and forced the Saudis to repay the term loan and also to infuse additional subordinated loans.
This is very good for the company. -
ER is probably due tomorrow. Anyway the latest is May 3nd.
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Book value of the equity will be ~ negative $20-30 million end of the year. This does not include the value of the main brands.
The value of the brands is easily $300 million!
This is why even in worst case scenario the value of the company in minimum 20$ a share. -
Imagine 2025:
Sales 1.7B$
GM 35%
EBITDA 10% or $170 million.
Market cap 7.5 times EBITDA minus $200 million debt is 1.075B$ market cap or 86$ a share. This is doable just need to focus on good collection, buy at right price and execute.
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