Morningstar

CEO Departure Doesn’t Diminish Our View of Starbucks

We’re maintaining our wide moat rating and fair value estimate for the company given its deep bench of management talent.

Securities In This Article
Starbucks Corp
(SBUX)

While most of the focus is rightfully on new CEO Johnson and his extensive consumer technology background, we remind investors that Schultz will still be involved with the development of Starbucks' premium Roastery and Reserve stores and that the management bench still features key executives like chief strategy officer Matt Ryan, Siren retail head Cliff Burrows, core retail head John Culver, channel development head Michael Conway, and CFO Scott Maw, each of whom we'd place at the top of their respective areas of expertise based on our previous interactions. For this reason, we don't equate Schultz's transition to that of 2000, when he assumed the chairman role and appointed Jim Donald as CEO (before eventually returning as CEO in 2008 following disappointing sales figures and a "watering down of the Starbucks experience" as Schultz described in a February 2007 memo to Donald).

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About the Author

R.J. Hottovy

Sector Strategist
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R.J. Hottovy, CFA, is a consumer strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He is responsible for consumer discretionary and staples research. He has covered the consumer sector as an analyst and director of global consumer equity research for Morningstar since joining the company in 2008, and specializes in a broad range of consumer categories including restaurants, footwear and apparel retailers, consumer electronics retailers, fitness clubs, home improvement and furnishing retailers, and consumer product manufacturers.

Before joining Morningstar, Hottovy was a director and senior stock analyst for Next Generation Equity and an analyst for William Blair & Co., specializing in a wide range of retail and consumer product companies. He also spent two years at Deutsche Bank, covering waste management, water utilities, and equipment rental stocks.

Hottovy holds a bachelor’s degree in finance and a second degree in computer applications from the University of Notre Dame, where he graduated magna cum laude. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Institute and the CFA Society of Chicago.

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