Twenty years ago Starbucks (SBUX -0.38%) was successfully building a chain of uniformly familiar coffee houses. The prospect of becoming one of the planet's most prolific food and beverage outfits, however, seemed remote at the time.
We now know that's exactly what was in the cards. Its store count went from 7,800 stores then to nearly 39,000 stores as of the end of March, and quarterly revenue has grown from roughly $1 billion to $8 billion.
Investors who were able to recognize its growth potential, of course, have been well rewarded for their patience.
Talk about being in the right place at the right time!
Starbucks is far older than 20 years, for the record. Its first store was opened all the way back in 1971, and it took several years after that to get its growth train moving in earnest.
In retrospect though, the company reached its full stride at a perfect time. From the mid-1980s through pre-pandemic 2019, consumers all over the world -- and in the United States in particular -- increasingly made shopping as well as eating and drinking away from home commonplace. Starbucks provided a premium product these people wanted where they wanted it. No other outfit was willing or able to do the same.
End result for investors? Just since mid-2004 Starbucks stock has soared from a price near $10.80 to its current value of just over $79 per share. A $1,000 investment in the company then would be worth roughly $7,300 today.
Don't expect Starbucks stock to repeat the feat
Consumers are still paying for Starbucks' premium coffee and beverages. But, this company's highest-growth days are seemingly in the past. With nearly 40,000 locales already in existence, it's arguable the company is running out of places to establish new stores that won't at least partially cannibalize existing ones. Then there's the rise of more casual competition like Dutch Bros to contend with.
It's not a bad stock to own, to be clear. But another 630% gain over the next 20 years seems highly unlikely.
