Starbucks has seen significant growth since the 1990s, expanding from 700 stores to 16,000 today. However, the shift towards mobile ordering has negatively impacted the customer experience, leading to longer lines and overwhelmed staff.
New CEO Brian Niccol is focused on enhancing the in-store experience, which appears to be yielding positive results, as evidenced by a 12% increase in shares this year. Despite this, the stock has struggled over the past five years and is currently trading at around 30 times forward earnings, which is high compared to the industry average of approximately 12 times.
The company has also divested 60% of its China retail operations, which has improved its financial flexibility and may allow for future buybacks and dividends. From an options trading perspective, the article suggests a strategy of selling a November $85 put and a November $105 call, which could yield a 16% annualized return if the stock remains stable.
However, there are risks involved, including potential losses if the stock price moves significantly outside the $82.75 to $107.25 range