Starbucks (NASDAQ:SBUX) may have endured investor negativity several months ago, but it's recently regained a lot of love. The company wooed Wall Street by ratcheting up its drink prices, and made investors' hearts beat even faster by declaring that it can open 40,000 stores, a 33% jump from its previous estimate. In keeping with the company's outlook for amazing growth, TheMoscow Times reported that Starbucks' first Russian coffee shop is coming soon.
According to The Moscow Times, Starbucks has finally gained permission to use its name and logo in Russia; its logo had previously been registered by a Russian company. The article seemed to focus on the negative, pointing out analysts' observations that Russians don't have a "coffeehouse culture," they tend to prefer food with their coffee, and they aren't big fans of ordering coffee "to go."
Of course, this is nothing new for anyone who follows Starbucks. Analysts and investors have often fretted that the global company might not catch on with certain cultures. (There were concerns about Starbucks' prospects in Asia, which was best known for its penchant for tea.) Yet Starbucks has often proved doubters wrong. Although certain cultural proclivities might indeed make Starbucks' entry into certain countries difficult, history suggests that many cultures are more receptive to the java juggernaut than they might initially appear.
Since Starbucks' international expansion into large, growing markets is an important part of its growth plan, news of its baby steps into Russia makes me a happy investor. But another recent announcement left me less pleased.
Last week, investors learned that Starbucks has decided to report its sales data (including same-store sales) quarterly, instead of monthly. Starbucks cited the frequent volatility of its stock following monthly releases -- the usual reasoning companies give when they decide to reduce comps disclosure -- and contended that such frequent disclosures encourage a short-term focus among investors.
True, some retail stocks do go a little insane on monthly comps. Nonetheless, I can't condone less frequent or detailed information on how a company's sales are resonating with customers. Last summer, I noted an apparently growing trend among retailers to diminish or eliminate such data disclosures. Companies that have recently decided to reduce reporting this metric include Talbots (NYSE:TLB) and Home Depot (NYSE:HD), while Sears Holdings' (NASDAQ:SHLD) Eddie Lampert has been vocal about monthly same-store sales reports' shortcomings.
As Fools, we often stress that monthly comps data isn't the be-all and end-all for investors making any decision about the long-term viability of a retail investment. Such data should only be viewed as one useful part of the big picture.
I'm still enthusiastic about Starbucks' long-term growth into new and exciting international markets, but I'm not pleased that such a major retailer would couple such expansive plans with a reduction in the timely sales data it provides to investors.
Careful -- further Foolishness may be hot:
- Fools dueled on Starbucks recently.
- Is Starbucks ready for breakfast?
- Starbucks lets loose with a price hike.
Starbucks is a Motley Fool Stock Advisor recommendation. Home Depot is a Motley Fool Inside Value selection. Whatever your investing style, the Fool has a newsletter for you, and a free 30-day trial to match.
Alyce Lomax owns shares of Starbucks. The Fool has a 24/7 disclosure policy.
