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Starbucks Corporation

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Shares of Starbucks have underperformed the industry in the past three months. Although the company reported better-than-expected results in third-quarter fiscal 2018, investors’ sentiments were hurt by its dismal China-Asia-Pacific comps. Moreover, operating margin contraction over the past few quarters has been a major concern for the company. Starbucks  has been also experiencing tepid comps growth in the United States. Following third-quarter fiscal 2018 results, the company said that it expects comps growth to be marginally below the earlier guided range of 3-5%. However, Starbucks’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program and digital offerings remain strong. Again, digital initiatives like mobile order/pay, delivery services and third-party loyalty partnerships can stimulate robust sales trends in the Americas.

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