Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have watched Starbucks for nearly forty years, and we admire much about it. It built one of the great consumer brands of the twentieth century out of a commodity bean that trades on an exchange. But our job here is not to admire; it is to decide whether this business, at this price, with this balance sheet, deserves fresh capital. Our answer is no. Three things drive the rating. First, the events of 2023 through 2025 revealed that the moat is narrower than legend holds: customers defected in droves over price and slow service, the company lost its own home turf in China to a discounter, and winning customers back has required a $150,000-per-store remodeling campaign across thousands of stores plus hundreds of millions in labor reinvestment. A franchise that must spend that heavily merely to regain its old position is a good business, not a wonderful one.
Recent filings analysed: 8-K (2026-07-29), 10-Q (2026-07-29), 8-K (2026-06-12), 8-K (2026-05-20).
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