Jim Cramer says he's not selling his charitable trust's shares in Starbucks (SBUX) despite recent disappointing results, as current CEO Howard Shultz and his incoming successor Kevin Johnson have "earned" the right to fix things.
"We're not going to give up on [Starbucks] now," Cramer said in an exclusive conference call with members of his Action Alerts PLUS investment club. "It's not like [the trust's shares of] General Electric (GE) , where I feel very tentative about it because [GE chief] Jeff Immelt hasn't earned the loyalty that Howard Schultz has."
Starbucks' share price has fluctuated but ultimately gone nowhere since July 2015, with the chain's U.S. sales growth disappointing analysts for two straight quarters. SBUX executives blamed the latest sales miss on too many customers placing orders online and crowding stores to pick up their food and beverages.
"They have mobile ordering which loved, but they have not addressed the mobile ordering at the actual physical plant," Cramer said. "There's one register, there's only one milk steamer. You come in and there are a lot of people waiting and you're waiting in line and guys look like they're cutting and it's hurting same-store sales."
But the stock-picker said Starbucks management "know there's a problem, [and] we're going to let them have the time to fix it. They have assured me that they are going to fix it."
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