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In January 2008, Seattle-based Starbucks Corp. Chairman Howard Schultz took back his role as CEO, replacing CEO Jim Donald as part of a plan to turn around the struggling chain of coffee houses. Schultz, who previously served as CEO from 1987 to 2000, said he was returning to the CEO role "for the long term" and that his agenda would also include streamlining the company's management.
Starbucks is Goldman Sachs' favorite pick within the restaurant industry. It believes Starbucks has "the best supply/demand dynamics in 25 years." The number of U.S. restaurants has fallen to 1986 levels, following recession closings. According to Goldman, Starbucks is due to return 36 percent in 2011 on multiple expansion and steady earnings growth, and thinks the Street is underestimating same-store sales growth for the coffee chain, forecasting a 7 percent to 8 percent uptick in 2011. Goldman adds that emerging market expansion will add fuel to the fire, bolstering 2011 sales.
Last year, Fortune magazine chose Schultz as one of the most admired CEO's (No. 27). Asked the secret of his success, he recounted four principles: "Don't be threatened by people smarter than you. Compromise anything but your core values. Seek to renew yourself even when you are hitting home runs. And everything matters." Good advice for all leaders.
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