The company is experiencing cost pressures from wages and input costs though, and China same-store sales were down 23% due to zero-COVID policy restrictions and lockdowns.” and International exChina, with solid revenue growth across those regions. Samestore sales were up double-digits in the U.S. “ Starbucks, which garners a lower weighting in the Portfolio, had slightly better than average three-month performance. Here is what Polen Global Growth has to say about Starbucks Corporation (NASDAQ:SBUX) in its Q2 2022 investor letter: The stock closed at $89.35 per share on October 06, 2022. Starbucks Corporation (NASDAQ:SBUX) delivered a -23.61% return since the beginning of the year, while its 12-month returns are down by -20.37%. Founded in 1971, Starbucks Corporation (NASDAQ:SBUX) is a Seattle, Washington-based coffeehouse company with a $102.5 billion market capitalization. Companies are looking to do two things to improve their DSO: make their internal receivables processes more efficient by taking advantage of tools to capture and process data more quickly, and make it easier and more convenient for customers to pay.In its Q2 2022 investor letter, Polen Global Growth mentioned Starbucks Corporation (NASDAQ: SBUX ) and explained its insights for the company. Reducing DSO. The final lever is to accelerate receivables, albeit in an environment in which customers are seeking to preserve their own cash. However, as the effects of the 2020 lockdowns affected physical supply chains globally, many organizations have been reviewing their “just-in-time” processes, and reassessing the robustness of their supplier base, making reducing DIO more difficult.
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Inventory management software allied to “just-in-time” methodologies allowed companies to reduce the DIO and minimize warehousing costs. Reducing DIO. Establishing lean procurement and production processes has long been seen as an effective way to reduce the CCC. It may not make good long-term business sense to put suppliers in a position where their own cash flow is under pressure. More generally, while it is good for the company’s own working capital position to delay payment as long as possible, it should consider the impact of delaying payment on its own supply chain. Moreover, it can often be easier, especially for larger organizations, to impose longer payment terms on their smaller suppliers than to identify efficiencies elsewhere. Procurement decisions are squarely within a company’s control, and finance is able to determine when to make payments to suppliers. Increasing DPO. Trying to extend DPO (i.e., to increase the use of supplier credit) has been a common way to improve the CCC.
There are three key levers to managing the Cash Conversion Cycle (CCC) = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) – Days Payable Outstanding (DPO)
Managing working capital efficiently provides companies with a degree of resilience against external events, a position emphasized by the impact of the 2020 global lockdown on business activity and the associated cash flows. Our vision was to focus on activities delivering the highest business value.įrom Jesse Todd's presentation at Association for Financial Professionals' event, Get Your Data Right, moderated by Geetanjali Tandon.Īll companies view cash - and #workingcapital more generally - as the critical assets needed to achieve their business objectives. Once the data are connected and available in aĬonsistent and trusted source, we can provide that data as a service and enable end users the flexibility they need to support their business.ĭelivering data means we provide finance teams and business partners with the data they need, fully packaged, connected and optimized, to enable them to focus on creating clarity and making the next, best decision instead of wrangling data. The key is to deliver a common set of explorable metrics and measures that are all connected through common hierarchies and data schema. We wanted to make sure every single person in an analytical role, whether they sat in finance or marketing or sales or engineering, was able to trust that the data they used would be connected to the source and would be recognized as the “right” data.Īt the same time, we wanted to create a system that would support flexibility at the edge, that is closer to the customer or end-user, because we knew that we were not going to centrally design the one dashboard or set of standard reports to meet every business need.
A key principle of our data strategy was developing discipline at the core.
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