DNKN - Can This Company Knock Starbucks Off Its Throne?
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There have been few success stories in recent decades to match the extraordinary growth of Starbucks (NASDAQ: SBUX). Founded in 1971, the company steadily rose over time from a small Seattle chain to the coffee giant we all know and love (or love to hate). From 1987 onward, Starbucks has been opening roughly two stores around the world each day, and a new store in China about every 15 hours.
In the past two months, however, the company has seen an unusual 15% decline in its share price. We can attribute this partly to concerns among investors about a potential oncoming recession. With its premium prices and reputation as a minor daily luxury, Starbucks is particularly sensitive to shifts in consumer spending. Some of these fears should be allayed by the company's continued growth in China, but investors will get a better indicator of its overall financial health when the next earnings report comes out at the end of October.