The Beaten Down Pumpkin Spice Stock That’s Twice As Nice

A coffee lover’s nightmare and a long-term investor’s dream? [View in browser]( [The Juice Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Top Restaurant Stock Searches This Month Rank Name Searches #1 McDonald’s 38,549 #2 Starbucks 36,344 #3 Chipotle Mexican Grill 21,780 #4 Domino's Pizza 10,944 #5 Restaurant Brands International 4,580 #ad [It's time you learn about Alternative Investments!]( Brought to you by [Masterworks]( [98% of the rich invest 5%+ in art – you can too]( [ Masterworks - 98% of the rich invest 5%+ in art – you can too]( One reason the ultra-rich aren’t worried about a global economic meltdown? Their financial futures are protected in alternative assets that can withstand market turmoil. For example, according to a report by global investment bank UBS, 98% of rich collectors reported investing at least 5% of their total wealth in art, with some investing over 50% in art! But you’re probably wondering: how is the average investor supposed to get access to an asset that has been the exclusive domain of the ultra-rich for centuries? The answer is Masterworks, an award-winning platform for investing in shares of multi-million dollar art. It's not just easy to use – Masterworks has completed 14 exits on their artwork, all of them profitable, with the last three delivering net annualized returns of 17.8%, 21.5% and 35% to investors. Today, you can use this exclusive link to skip the waitlist. [Skip the waitlist]( *See important Reg A disclosures at [masterworks.com/cd](. The Beaten Down Pumpkin Spice Stock That’s Twice As Nice Here at The Juice, we love pulp in our OJ, but we’re not huge fans of pumpkin spice in our coffee. We realize this probably puts us in the minority and makes us look super old among Gen Zers and millennials who can’t get enough of Starbucks (SBUX) specialty drinks. But we’ll take the shade, because we’re hip to what’s happening on the street. And this makes us - if we may say so ourselves - pretty damn good long-term investors. You don’t have to love pumpkin spice to know that it - and its broader category - helps drive Starbucks’ success with young people. So we’ll take a grande medium roast Pike Place - no cream, no sugar, we like it black - and another lot of SBUX stock. We’ll show you why we still love Starbucks’ beaten down stock in a second, but first pumpkin spice. It’s getting a bit out of hand. Dunkin’ debuted its pumpkin spice drinks on August 16. But they weren’t even first. 7-Eleven boasted that “it’s earlier than ever this year” when it launched its pumpkin spice coffee drinks on August 1. Krispy Kreme (DNUT) did likewise a week later. Soon everybody will be in on the action with names including, but hardly limited to IHOP, Carvel and Jamba adding pumpkin spice items to their menus. You see what’s happening here, right? A few things: - It has become a thing to make fun of absurdly early releases of pumpkin-spice everything. So brands, particularly 7-Eleven, basically turn it into a meme. Look at us, we’re ludicrous and painfully cool at the same time, releasing pumpkin spice so soon! - People might make fun of fall drinks hitting restaurants and cafes during the heat of summer, but they can’t get enough. The week after Starbucks launched its 2022 pumpkin spice menu, traffic surged nearly 26%. That week was the company’s biggest week of sales in its 50-plus year history. - Speaking of Starbucks, they started the whole pumpkin spice craze 20 years ago. You should start seeing the famed Pumpkin Spice Latte at Starbucks sometime this week. And this is why we love Starbucks’ stock, even though it’s down roughly 4.7% YTD, down about 7% over the last six months and off approximately 6.5% over the last 30 days. Not directly because of the PSL (yep, it has become an acronym), but because of what it symbolizes. Consider [what we explored in August of 2022]( when suggested looking at SBUX: - Cold beverages comprised 75% of US sales in the quarter. And not just because it has been hot outside. It’s because you can see the contents of the drink. And these contents are decreasingly a drab coffee color. More frequently, they’re vivid and flamboyant colors with lots of foam and whipped cream. Or maybe a shaken espresso with chocolate sauce lining the inside and bottom of the cup. The key to these drinks: You can customize them. And they’re Instagramable. Consider what SBUX CEO Howard Schultz said on the aforementioned call: And why we highlighted cold beverages so much was two reasons. One is that is a Gen Z product… Secondarily, we have a significant competitive advantage in our ability to customize almost any beverage that our customers want with speed… The modifiers are raising the ticket and the modifiers produce color and excitement to this Gen Z audience and they immediately put it on social media. But we’re in the early stages of the cold beverage platform in terms of what we’re going to bring in terms of innovation and the modifiers and the customization gives us a significant competitive advantage. While Schultz is no longer CEO, Starbucks continues to capitalize on this trend. From the company’s recent Q3/2023 earnings call: In Q3, over 60% of beverages were customized, representing a 9% growth when compared to just five years ago. Cold Foam, for example, continues to be a customization favorite. Customization doesn’t only increase social media presence, word of mouth and scream status among young people, it helps drive revenue. There are over 170,000 different ways to customize a Starbucks’ beverage. How much extra you pay for customization depends on how you choose to do you. We hit up the Starbucks’ app and stopped short of placing an order at a Los Angeles location to compare prices: - Grande Caffe Latte, as is: $4.75 - Grande Caffe Latte, with Chocolate Cream Cold Foam: $6.00 - Grande Caffe Latte, with Chocolate Cream Cold Foam and four pumps of Mocha Sauce: $6.80 That’s a lot of sugar and some serious upselling at the point of freaking purchase. Growth in the percentage of drinks that are customized might be one of the key metrics to keep an eye on. Because it’s important. And growing. Funny thing is, like Apple (AAPL), Starbucks beat analyst expectations on sales and profit in Q3 and Wall Street sold off the stock. Why? Because it didn’t like that same-store sales grew by only 10%, not the projected 11%. Meantime, Starbucks maintained guidance for the current quarter and even upped the low end of EPS expectations. The company continues to crush it around the globe, most notably in China, where same-store sales skyrocketed 46%. And Starbucks’ customers are more loyal than ever: - Starbucks’ Rewards global membership hit almost 75 million in Q3, growing by more than 25% in the quarter. - Domestically, Starbucks has 4 million more active Rewards members this year than last. - Rewards members accounted for 57% of the company’s tender in the quarter. We can’t find any real concerning news at Starbucks, especially if you’re investing for the long haul. [A Daily Stock Pick With Professional Analysis]( Searching for the right stocks to buy is exhausting. At The Spill, we have you covered with ratings and expert analysis – direct to your inbox. [Sign up today]( The Bottom Line: Yet another stock to consider dollar cost averaging into. This is easily one of our favorite long-term investing strategies. As you receive money, take some of it and spread it around your favorite stocks. For an illustration of how dollar cost averaging works, [see this recent edition]( of The Juice, where we show, in detail, how it turned out with DoorDash (DASH). However you decide to go about it, always consider well-established and innovative companies with loyal followings on weakness. Especially on weakness after a pretty impressive earnings report where the long-term narrative remains more than intact. As it does at Starbucks. 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