Starbucks (SBUX) broke below $25 today, not too far from its 52-week low. Less than a year ago, the shares traded over $40.

The last significant analyst call on the company was a Banc of America downgrade late this September which took the shares from "neutral" to "sell". But, that was over four weeks ago which can be a long time in this market.

Expectations are that the company will grow over 20% again when it reports earnings next month. Wall St. Expects revenue of $2,43 billion and an increase in EPS from $.17 last year to $.21 this.

Starbucks can do deals with Apple (AAPL) to put music downloads in stores and can get exclusives to sell CDs for big artists. It can say that the increase in milk prices will be passed on to customers. The problem with Starbucks is simple. Investors think it has too much competition now, and that it is a barricade to growth that the company cannot overcome.

That seems like old news. But, it is also new news. Starbucks management has been in the market saying that its long-term growth rates area achievable. No one is buying it.

Starbucks could solve part of that problem tomorrow. It could begin to release monthly same-store sales again. When it stopped a few quarters ago, Wall St. thought it had something to hide. The company felt that the numbers jacked the price around too much.

But, same-store sales are not only G2 for the markets, they are discipline for the management. Monthly numbers are like water torture, if the company is not keeping up. If it is, that story about the Starbucks growth machine, gone now for a year, comes back.

And, so do the shares.

Douglas A. McIntyre

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