Polen Capital Management, LLC on Starbucks Corporation
Thesis
Polen retained a positive view of Starbucks as the company executes an operating turnaround. Improving comparable-store sales and margins indicate the recovery is taking shape. However, after the share price began reflecting that progress, Polen trimmed the holding to fund a purchase of ASML. The pitch is therefore for a recovering consumer franchise with a valuation becoming less compelling.
“we believe the valuation is beginning to price in that turnaround.”
Key risks
- Current valuation may already price in the turnaround
- Same-store sales or margin improvements might fail to continue