24/7 Wall St.

Starbucks began the rocky phase of its relationship with Wall St. when its former CEO said that the company would eventually have 40,000 outlets. It had well under half of that when the prediction came out two years ago. Everyone in the financial district grabbed an abacus and figured Starbucks would have 20% annual earnings growth for a decade.

All of a sudden, a few months ago, Starbucks started to signal that its stock was not the stuff that dreams are made of. Slowing US sales cost the company’s CEO his job and shareholders more than half of their money.

Yesterday, Starbucks indicated that it had not heard the saying that those who do not learn from history are bound to repeat it.

The coffee company came out with an immodestly detailed plan which took its financial projections through the end of its 2011 fiscal year. With audacious precision Starbucks walked investors through the number of stores it would open each year, it use of capital, EPS growth, and operating margin targets. The company even forecast its tax rates.

Arrogant is as arrogant does. If Starbucks proved one thing over the last year it is that it has no talent for predicting what will happen to its business. It does only sell coffee, has a lot of new competition, and has no idea what will happen to the global economy.

Other than that, its forecasts are flawless.

Douglas A. McIntyre