When it comes to growth outside the U.S., Starbucks (Nasdaq: SBUX) means business. The coffee giant is reorganizing its management team to concentrate intensely on three geographic regions. Investors should applaud this new sign of the company's commitment to continued expansion.
Three existing company executives will take responsibility for Asia, the Americas, and Europe, Middle East, and Africa, respectively. This new management structure will help the company tackle coveted markets like China, Brazil, and India.
Starbucks has long eyed foreign markets for additional growth. However, its previous organization simply divided the world into the U.S. and the "international" market. Although my colleague Eric Bleeker recently revealed Starbucks' international success, this more focused approach could definitely help the company drive that growth even more aggressively. Eric also pointed out that rival Green Mountain Coffee Roasters (Nasdaq: GMCR) relies almost entirely on the U.S. marketplace -- and therefore, American consumers' willingness to spend on gourmet coffee).
International markets mean more than ever to companies and their investors. Expansion in huge, populous regions with growing middle-class consumers (like, oh, say, China) provides a key path to growth, especially as the U.S. economy continues to struggle. Yum! Brands' (NYSE: YUM) major Chinese presence has long provided a favorite bullish thesis for the stock. Wal-Mart's (NYSE: WMT) international plans have turned into a major initiative as the discount giant falters here at home.
Starbucks is currently trading at 22 times forward earnings. That pales in comparison to Green Mountain's whopping forward price-to-earnings ratio of 42, and makes McDonald's (NYSE: MCD) forward P/E of 15 look downright cheap. Still, if Starbucks can kick its international growth into full gear, future torrid growth could make today's price more of a value than it currently appears.
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