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Starbucks Corp SBUX

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After Contentious Clash, Buffalo Starbucks Store Unionizes; No FVE Impact Expected

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

A widely publicized union vote took place today at three of wide-moat Starbucks' Buffalo, New York, stores, with at least one of those units voting to organize as an affiliate of the Service Employees International Union. Cited goals in the union’s effort include better pay, more staffing in stores, and a longer training period, all of which were featured in management's Oct. 27 initiative (not coincidentally). While the store-by-store approach renders traction more attainable for union proponents, it curtails the rapidity with which sweeping changes can be made across a footprint of nearly 9,000 company-owned and 6,500 licensed stores in the United States. We foresee no immediate changes in the aftermath, with a protracted negotiating period likely to follow, and maintain our $109 fair value estimate.

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Company Profile

Business Description

Starbucks is one of the most widely recognized restaurant brands in the world, operating more than 33,800 stores across 83 countries as of the end of the firm's fiscal 2021. The firm operates in three segments: North America, international markets, and channel development (grocery and ready-to-drink beverage). The coffee chain generates revenue from company-operated stores, royalties, sales of equipment and products to license partners, ready-to-drink beverages, packaged coffee sales, and single-serve products.

Contact
2401 Utah Avenue South
Seattle, WA, 98134
T +1 206 447-1575
Sector Consumer Cyclical
Industry Restaurants
Most Recent Earnings Sep 30, 2021
Fiscal Year End Oct 3, 2022
Stock Type Cyclical
Employees 383,000

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