EPRT - Starbucks And McDonald's Still Play The Rent: The Case For Net-Lease REITs

2024-05-07 07:00:00 ET

Summary

• Starbucks and McDonald's reported less-than-stellar quarterly results, with lower revenue, earnings, and same-store sales growth.
• Both companies cited consumer pressures and declining industry traffic as reasons for their underperformance.
• Net-lease real estate investment trusts like Realty Income, Agree Realty and Essential Properties Realty Trust offer stability and growth potential in uncertain times.

This article was coproduced with Leo Nelissen.

I’m a Starbucks (SBX) fan.

I can’t help it.

That coffee calls me, as do some of their breakfast treats.

Like their oatmeal?

Sign me up, please.

That kind of combination just hits the spot for me.

So if my loyal readers are wondering, no. I’m not the reason why Starbucks reported less-than-stellar quarterly results.

The company is still getting my money, same as always.

Yet it isn’t receiving the same die-hard loyalty it used to from other customers. That’s clear from the financial headlines, much less the facts they summarize.

Yahoo’s “ Starbucks Stock Plunges 14% After Badly Missing Its Q2 Earnings Estimates ,” for instance, reads:

“For its second-quarter earnings, the company missed expectations across the board, posting lower-than-expected revenue, earnings, and same-store sales growth, as customers pulled back on the frequency of their visits and the size of their orders.

“Its shares opened 14% lower on Wednesday (after reporting) results after market close on Tuesday…

“Revenue for the second quarter dropped 2% year over year to $8.6 billion. Adjusted earnings per share also came in lower, down 8% to $0.68.”

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