Today is definitely not my day. Last night, I went to sleep knowing that my beloved Red Sox were down two games to none to the White Sox with a performance that I'll politely describe as lacking. This morning, while I was still half-asleep, I stubbed my toe on a doorjamb not once but twice. And to top it all off, a couple of companies I own have revised their guidance downward in the last couple of weeks.
Motley Fool Stock Advisor
But as my editor reminded me, there's still Starbucks
In last night's press release, CFO Michael Casey stated that he expects October same-store sales growth to fall back within the company's long-term target range of 3% to 7%. This prediction isn't terribly surprising, given the company's torrid 11% same-store sales increase in October of last year.
For the entire year, Starbucks' same-store sales came in up 8%, and total revenues were up 20% despite the fact that there was one less week in this year's fiscal calendar. Given the company's strong revenue performance and the importance of the effect of incremental sales for any retailer's bottom line, it seems a safe bet that Starbucks earnings will come in on target when it reports fiscal year-end results in November.
There's potential for competition from Caribou Coffee
The only bugaboo with Starbucks remains valuation. Its trailing P/E of 44 is high, but historically normal for the company -- and not completely unreasonable given its forward guidance on earnings and sales. Nevertheless, it's just not cheap enough to entice me to purchase more shares. But with the way things are going for me lately, I may just get that chance to buy it cheaper.
There's more Foolishness percolating here:
PetSmart is a Motley Fool Stock Advisor recommendation.
Nathan Parmelee is confident things will work out just fine in the long run. He owns shares in Starbucks and PetSmart and is happy to own shares in both. Nate has no financial interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.