Lost in the shuffle were the fabulous packaged-goods initiatives, the Teavana rollout and the day-part expansion. Instead the mob wanted facts and figures about how the Boulange food rollout was impacting comparable-store sales, and Starbucks management just wouldn't go there. It didn't seem to matter to the analysts one bit that Starbucks may actually be using its stores as launching pads for supermarket aisle takeaway and for lunch and dinner, a true monetization of bricks and mortar.
Frankly, I found the Q&A here of the total nitpick variety, but I respect the fact that most of these analysts are trying to build models and they are flummoxed about how to interpret all of these initiatives within the confines of the spreadsheet, a common problem when it comes to this chain. How do you value loyalty? How do you put a price tag on affinity cards and mobile? They don't know how to do it, so the credit where credit should be isn't there. Instead, the focus is on kinks in new initiatives even though Howard took pains to point out that the Panera problem -- slow throughput on hard-to-make specials -- and new products isn't an issue for Starbucks.
The commonality of both conference calls? Managements are trying to explain how good business is and analysts were crafting possible theses about how business reached its zenith and it is all downhill from here. Hence the tentative nature of after-hours trading.
To me, we're getting a chance to buy companies at the top of their games for less than we might otherwise because of these updates, making the stocks more of a value. That's necessary because of the heightened valuations and the run-ups into the quarters.Bottom line: these companies are terrific and while their stocks may be expensive, they are better than just about everyone else at what they do and to bail from best of breed this easily seems a little glib and a lot fatuous and I'm just not going there. Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long FB. Editor's Note: This article was originally published at 8:29 a.m. EDT on Real Money on Oct. 31.
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