NEW YORK (TheStreet) -- Starbucks (SBUX) made a pointed gesture to Congress in its latest promotion to offer customers a free coffee when they buy a drink for a fellow customer. In a memo to employees, CEO and Chairman Howard Schultz said the pay-it-forward promotion was an effort to stop the "seemingly unending cycle of dysfunction and doubt."
"This is a different yet authentic way Starbucks can help our fellow citizens to Come Together by supporting one another during a particularly challenging time," he wrote.
Schultz has weighed in on the U.S. government shutdown, now in its ninth day, and the impending debt ceiling deadline. He has called the "irresponsibility" disappointing. In a letter to the business community on Monday, Schultz encouraged chief executives to wield their influence to end the political deadlock.
"Consider what your companies and organizations can do to help shift the norms of our country back toward civility, compromise and problem-solving," he said. "We can remind the Congress and the President of their duty to put citizenship over partisanship for the sake of our country."
Starbucks shares were 0.76% lower at $74.96 on Wednesday. The S&P 500 was down 0.12%.
Starbucks' promotion begins Wednesday and runs through Friday.
TheStreet Ratings team rates Starbucks Corp as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about its recommendation:
"We rate STARBUCKS CORP (SBUX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SBUX's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SBUX's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, STARBUCKS CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- STARBUCKS CORP has improved earnings per share by 27.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, STARBUCKS CORP increased its bottom line by earning $1.79 a share vs. $1.62 a share in the prior year. This year, the market expects an improvement in earnings ($2.23 vs. $1.79).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 25.5% when compared to the same quarter one year prior, rising from $332.9 million to $417.8 million.
- You can view the full analysis from the report here: SBUX Ratings Report
Written by Keris Alison Lahiff.