Cramer: Starbucks Needs to Do 6% Comps in U.S.

The coffee retailer needs to be able to talk about an acceleration, Cramer says.
By Armie Margaret Lee ,

Coffee chain Starbucks (SBUX) - Get Report needs to do 6% comparable-store sales in the U.S., TheStreet's founder Jim Cramer said on Wednesday.

"They need to be able to talk about an acceleration," said Cramer, manager of the Action Action Alerts PLUS portfolio, which owns Starbucks.

Cramer likened the stock to that of footwear maker Nike (NKE) - Get Report .

"It's a senior growth stock with a very high multiple that very few like," Cramer said.

His comments came on the heels of Starbucks' announcement on Tuesday that it was raising prices. The company said that depending on the market, customers in U.S. company-operated stores will see increases of 10 to 20 cents on select sizes of brewed coffee and 10 to 30 cents on espresso beverages and tea lattes.

Meanwhile, it's not just prices that are going up at Starbucks.

The company on Monday unveiled changes to its employee compensation policy, including raises of at least 5% for employees and store managers at U.S. company-operated stores, effective Oct. 3.

On Wednesday afternoon, the stock was trading at $56.53, down 1.7%. The stock is down nearly 6% year-to-date.

Cramer on Tuesday included Starbucks on a list of 10 stocks that need to start doing better.

In an article on Real Money, Cramer wrote that it has become "so frustrating at this point and has been in no man's land so long, that you have to believe that unless there is a serious re-acceleration in earnings power, this company, too, is going to be said to have its best days behind it. I don't believe that.

"I think that Starbucks is given to some serious growth spurts and then a rest. This is no different. Still, it's unnerving to see it stay at $55-$56 during this incredible run we have just had, and it makes me think that the talk of a slowing isn't off-base, even as my trust stays true to it," he wrote.

Starbucks is set to report results for the third quarter of fiscal 2016 on July 21. Analysts estimate adjusted earnings per share of nearly 49 cents on revenue of $5.34 billion, according to Bloomberg.

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