Despite Starbucks stock being down for the year to date, hurt by the global COVID-19 pandemic, the coffee giant is poised to emerge stronger than ever as the crisis has made the chain more efficient.
Analyst Andrew Charles sees the early signs of the U.S. recovery as durable for Starbucks, helped by its strong digital platform, and curbside pickup options. Moreover, despite COVID-related headwinds, he thinks the pandemic has presented new efficiency opportunities for the company’s Growth at Scale agenda, driving 15 percent earnings-per-share growth as early as 2022.
A sales recovery through next year would also help Starbucks as it looks to jump-start its Growth at Scale strategy, which includes shuttering underperforming locations and controlling costs. Charles believes that the company will continue to make progress on these initiatives, as well as deliver menu innovation and potentially refranchise in key markets.
Starbucks is optimistic the sales drivers the brand is pursuing can help restore habit amid disrupted routines and produce upside versus consensus comps over the next 12 months. Charles believes that the company will ultimately exit the crisis as a stronger operator, helped by its digital ordering, menu improvements, and most recently, the return of pumpkin spice lattes.