Starbucks raised its quarterly dividend by $0.01 to $0.63 per share, or $2.52 annually, a yield just under 2.5%, extending its streak of annual raises since 2010 and bringing total annual dividend spending to nearly $2.9 billion. Fiscal third-quarter revenue fell slightly over 1% year over year to $9.3 billion, largely because the company moved a majority stake in its China business into a 60/40 licensed joint venture led by Boyu Capital, while global comparable store sales rose nearly 8%, with North America at 8.1% and international at 5.7%. Operating income rose 5% to $980 million, and GAAP net income jumped 87% to almost $1.05 billion, boosted by the China stake sale and federal tariff refunds. The company credits its Back to Starbucks strategy under CEO Brian Niccol for the gains; the author agrees the improvements are real but argues that a forward P/E above 32 prices the stock like a growth company, so the dividend hike is not enough reason for him to invest.
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