Is Starbucks Corporation (SBUX) Invincible?

Many consumers love Starbucks Corporation (NASDAQ:SBUX) for its premium coffee and comfortable atmosphere, while investors have fallen in love with its returns. What plans does Starbucks have for continued growth? And is Starbucks worth the risk in a slow-growth global economy?

Starbucks continues to grow

As many companies throughout the broader market cut costs and close stores, Starbucks Corporation (NASDAQ:SBUX) plans on opening approximately 3,000 stores over the next four years. It should also be noted that more than half of these stores will be of the drive-thru variety.

One of the key selling points for Starbucks has been its comfortable atmosphere (Wi-Fi included.) Don’t worry; the drive-thru stores won’t act as a replacement to current stores, but as an addition. These drive-thru stores won’t just add convenience for current customers, but also help attract a different market.

As far as revenue, earnings, and same-store growth, all have been impressive. Revenue and earnings have improved for three consecutive years on an annual basis. As far as the last quarter is concerned, revenue increased 11.30%, earnings increased 26%, and same-store sales increased 6%. How has all this been possible?

Starbucks Corporation (NASDAQ:SBUX) is expanding in emerging markets, constantly innovating new beverages and food, acquiring young companies with potential, and penetrating homes with Verismo Machines and Pods, and K-Cup packs. Reduced coffee costs have also helped aid the bottom line. Starbucks management is confident in about the future. FY2013 EPS guidance has been upped to $2.12-$2.18 from $2.06-$2.15. What could possibly go wrong?

Believe it or not, risks exist

Starbucks has been performing well in the United States and Asia. However, Starbucks Corporation (NASDAQ:SBUX) is trading at a lofty 25 times forward earnings, Europe is weak, and the stock’s approximate drop of 50% during the financial crisis of 2008 and 2009 proved that it’s not overly resilient.

The good news is that Starbucks is now more diversified than in 2008 and 2009, and it has penetrated more markets. However, this doesn’t mean Starbucks should act as a safe haven if the market were to suffer a steep correction. It simply means that its business should enjoy more safety than last time around.