Shares in Starbucks (SBUX) have fallen from $40 last November to about $25 now. The great majority of the market believes that the coffee retailer cannot continue to show 6% or better same-store growth and 20% quarter over last year’s quarter revenue improvement. Analysts expect revenue to move up 21% to $2.42 billion and EPS to move from $.17 last year to $.21 in the most recent quarter.

Wall St. does not believe that Starbucks can keep growing at these rates, at least not in the US. The theory is that there are too many stores. The same sort of theory took McDonald’s (MCD) shares down below $14 in early 2003. That stock now changes hands at $57.

McDonald’s began to sell a wider array of food and beverages, and that helped it improve same-store sales. But, McDonald’s had too many store in the US, too. That is until investor figures out that it didn’t.

Starbucks has added music and food selection to its stores. It has a nifty deal with Apple (AAPL) to sell iTunes in its outlets. And, the company sells pre-packed coffee at supermarkets.

The conventional wisdom is that Starbucks is toast. It years as a growth stock are over. It was a nice idea while it lasted.

Just like McDonald’s in 2003.

Douglas A. McIntyre

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