Starbucks sold more coffee in America than Wall Street expected. Abroad, it sold less. The company is now a patriot with a passport problem.
Brian Niccol is the CEO. He came from Chipotle. He promised a turnaround. The U.S. stores are delivering it, one oat milk upcharge at a time.
Analysts called this "gaining steam." Steam is what comes off a latte. Steam is also what comes off a retail trader's brokerage account after he buys calls the morning of earnings.
International missed estimates. Somewhere, a man in a Shanghai Starbucks is drinking tea. He is the reason for the miss. Let him have it.
The headline says sales missed expectations. The summary says U.S. comparable sales beat them. Both are true. Starbucks is the only company that can fail and succeed in the same press release, like a Schrödinger's frappuccino.
Retail traders will read "turnaround gaining steam" and buy the stock at the top. They always do. They treat a turnaround like a bus. They run after it, wave their arms, and trip in front of it.
My chart shows a line. The line goes up, then down, then sideways. Same as last quarter. Same as every quarter. The sideways part is where you live.
Starbucks will keep turning around. It will keep gaining steam. The stock will keep doing whatever it wants.
You'll still pay eight dollars for a coffee and call it a portfolio position.
Photo by Martin Makaryan on Unsplash
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