Twenty years ago Starbucks (NASDAQ: SBUX) He succeeded in building a chain of uniformly familiar cafes. However, the prospect of becoming one of the most prolific food and beverage companies on the planet seemed remote at the time.
And now we know that this is exactly what was expected. The number of its stores rose from 7,800 at the time to nearly 39,000 by the end of March, and quarterly revenues rose from about $1 billion to $8 billion.
Investors who were able to recognize its growth potential have certainly been well rewarded for their patience.
Talk about being in the right place at the right time!
Starbucks is twenty years older, for example. It opened its first store in 1971, and it took several years after that for its growth to begin in earnest.
In the past, the company reached its peak success at just the right time. From the mid-1980s until just before the pandemic in 2019, Consumers Around the world – and in the United States in particular – shopping, eating and drinking away from home has become increasingly common. Starbucks provided a distinctive product that these people wanted, wherever they wanted it. No other company was willing or able to do the same thing.
What’s the bottom line for investors? Since mid-2004, Starbucks shares have risen from a price near $10.80 to their current value of just over $79 per share. A $1,000 investment in the company at that time would be worth about $7,300 today.
Don’t expect Starbucks stock to repeat this feat
Consumers still pay for Starbucks’ premium coffee and beverages. But the company’s high-growth days appear to be over. With nearly 40,000 stores already, it’s fair to say the company is running out of places to build new stores that won’t at least partially take over existing ones. Then there’s the rise of Starbucks stores. More informal competition Likes Dutch brothers To deal with.
This stock is clearly not a bad one to own, but it is unlikely to post another 630% gain over the next 20 years.
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James Bromley He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has Disclosure policy.
If You Invested $1,000 In Starbucks Stock 20 Years Ago, Here’s How Much You’d Have Today Originally published by The Motley Fool
