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Sell Starbucks?

I'm just kidding. But everybody else is doing it.

Starbucks (Nasdaq: SBUX  ) shares are getting smashed, trading down 7% to $42.72 this morning after the coffee retailer posted a strong but relatively disappointing August. The company said that revenues for the four weeks ended Aug. 22 were up 25% to $418 million over last year, with same-store sales growth clocking in at 8%.

There isn't actually anything wrong with those numbers; it's just that investors have been spoiled. Starbucks has been projecting long-term same-store sales growth of 3% to 7% and then has simply blown that figure away month after month. August represents the first time in 2004 that the company hasn't registered a double-digit gain in same-store sales, as well as the lowest gain since May 2003.

While Starbucks remains a Fool favorite, it's worth noting that the stock still commands a healthy premium at 45 times this year's earnings. The stock has also reflected the company's performance, gaining 58% over the past year and 110% over the past two.

Despite competition from other specialty coffee retailers such as Peet's Coffee & Tea (Nasdaq: PEET  ) , as well as competitive aspirations from the likes of McDonald's (NYSE: MCD  ) and Motley Fool Stock Advisor pick Krispy Kreme Doughnuts (NYSE: KKD  ) , and even Wal-Mart (NYSE: WMT  ) to some mild extent, Starbucks maintains the dominant brand -- enough so that it should be able to withstand a price hike, perhaps later this year. The company has also been successful in reaching more and more customers beyond its core high-end coffee drinkers by introducing new products, including sandwiches, desserts, light versions of its Frappuccinos, and noncoffee beverages.

That said, while the current stock price offers zero margin of safety for a buy, Starbucks remains the kind of company that every Fool should aspire to own.

For more Foolish coverage of the company, see:

Sell or hold? Give us your take on theStarbucksdiscussion board.

Fool contributor Jeff Hwang owns shares of Starbucks.

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