SBUX stock performance: Why you know the Starbucks name
Historical financial performance
Starbucks (SBUX) is widely recognized as America’s largest brick and mortar coffee house chain. Financial success since its appearance in 1971 is largely attributable to strong domestic brand recognition. The key to the development of this recognition was aggressive location growth. Essentially, it was Starbucks’ mission to have a green, twin-tailed siren on every street corner. Historically, this growth was funded by equity issuance. Over time, Starbucks’ asset pool grew, positively affecting perceptions of creditworthiness among lenders and allowing Starbucks to leverage itself and pursue further expansion efforts. This campaign of debt acquisition was successful, as gross store count has doubled since 2004.
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Since the 2009 recession, the company has sharpened its focus on increasing international store count to mitigate the risks attributable to local unfavorable economic conditions. It has also been attempting to improve international brand awareness. The most recent debt issuance, reflected in the company’s higher debt-to-equity ratio from 2012, was used to fund international capital expenses (reflected in the 2013 store count increase) and a repurchase of the company’s own shares. The convenience of having a specialty coffee shop on every corner is attractive to on-the-go consumers of today.