Starbucks: Winter Is Coming


  • SBUX’s financial performance over the next three quarters will be critical to its stock valuations, given the historic winter with potentially sky-high electricity bills.
  • Combined with the record high oil/gas and elevated food prices thus far, we expect to see a moderate pull-back in consumer discretionary spending through Q1’23.
  • It also remains to be seen how the new CEO would perform over the tough quarters ahead, since we already see signs of sales deceleration post reopening cadence.
  • Nothing burns like the cold. We shall see.

Investment Thesis

Despite Starbucks’ (NASDAQ:SBUX) optimistic guidance from its Investor Day presentation in early September, it remains to be seen if the company could survive the coming winter. The Feds have proved to be very concerned about the relatively elevated August CPI levels of 8.3%, leading to a 75 basis point hike.