Perking Right Along
Short sellers are almost as stuck on Starbucks Corp. as coffee lovers. Ever since the Seattle company went public in June, 1992, legions of investors have bet its stock would plunge. Sorry, shorts. Starbucks trades at a huge 90 times estimated earnings of $10 million on sales of $289 million for the fiscal year ending Oct. 2. And there is no sign of a falloff in price--unlike the 26% drop that hit Snapple on Aug. 3 after earnings growth slowed. Why? Starbucks plans
to up its coffee shops by 60%, to 626, in the next 14 months and is hiking its prices to offset rising costs in Brazil. Plus, there's talk of a deal with PepsiCo--possibly for joint marketing of canned or bottled iced coffee.