SBUX - Starbucks is Luckin' Out
In times of systematic uncertainty, going with the best in breed can help mitigate an investor's downside. Ubiquitous companies like Nike or Apple are generally better equipped to cut through turbulence than smaller organizations operating in the same space. Scale offers unmatched flexibility on both negotiating with suppliers as well as bolstering revenue. Generally speaking, size helps foster durability.
Starbucks (NASDAQ: SBUX), the largest coffee company in the world, fits seamlessly into this description. Their massive 30,000+ store footprint offers the Seattle-based coffee company unmatched pricing flexibility compared to smaller competition. Simply put, the massive organization can afford to make less money per cup than individual shops with less volume. The result: a small black coffee at Starbucks costs a fraction of what it does at my favorite local shop. This value proposition for the giant chain translates into intriguing company fundamentals.
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