Starbucks achieved its impressive performance mainly through price hikes that the market readily accepted. Despite its aggressive pricing strategy, Starbucks' margins remain only half of McDonald's, as discussed in previous columns.
 
A key distinction between the two companies is Starbucks' ongoing expansion strategy. With over 38,000 stores, nearly half of them outside the USA and 6,500 in China, the Seattle-based chain has doubled in size over the past decade. This growth has been cost-effective and highly profitable, with an estimated return on development investments ranging from 15% to 20%.
 
The market recognizes Starbucks as a genuine "blue chip" stock, appreciating its substantial value creation. Despite concerns about its exposure to the Chinese market, Starbucks has earned $30 billion in profits over the last decade. This profit was returned to shareholders through share buybacks totaling $30 billion, along with a $17 billion dividend payout.
The company adopted a bold financial strategy by relying solely on debt, resulting in negative equity. While this approach has served shareholders well, the stability of this financial engineering is contingent on avoiding any significant disruptions.