Cramer: I'm Trimming Starbucks
On his monthly call with members of the Action Alerts Portfolio Club, Jim Cramer offered his thoughts on Starbucks (SBUX) - Get Report .
Cramer said he trimmed holdings of the stock this week on concerns that expectations for better domestic same-store sales numbers are too optimistic.
"When expectations were at 2% to 3% growth and the stock was at $55, that was fine with me. But now expectations are for a minimum of 5% domestic store growth and the stock is at $61," Cramer said.
Starbucks is expected to report its latest results after the market closes Thursday.
Cramer's concerned that high expectations for the later half of the year are already getting priced in to the stock. "I fear that the next two points could be down," he said.
Cramer said the company is trying to fix problems with throughput, as people who order in advance using their mobile phones collide with in-store patrons "in a big mosh pit where I pick up my coffee." He said when the company fixes that problem, "I think it will go to $70."
