Howard Schultz is Stepping Down at Starbucks

Howard Schultz said he’s stepping down as executive chairman of Starbucks (SBUX). There’s been talk that he might run for president.

I’ll skip that topic to focus on the long-term performance of Starbucks. It’s been a truly remarkable company. They IPO’d 26 years ago this month at 27 cents per share (that’s $17 adjusted for six 2-for-1 splits.) Today, it closed at $57.07. Not bad.

Schultz had two runs as CEO, from 1986 to 2000 and then again from 2008 to 2017. He came on after the stock’s one terrible stretch.

Thanks to over-expansion, the stock fell from an intra-day high of $10 per share on November 16, 2006 down to $1.765 on November 21, 2008. Eighty percent losses tend to upset shareholders and that’s why Schultz was brought back. He helped turn the ship around, and today, there are more than 26,000 locations.

The company started paying a five-cent quarterly dividend in 2010. That’s been raised every year since then, and it’s now up to 30 cents per quarter. That’s a payout ratio of around 50%.

Posted by on June 5th, 2018 at 10:40 am


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