Cramer reacts to Starbucks losing top spot in China to Luckin Coffee

Starbucks Corp (NASDAQ: SBUX) is in focus today following a report that it is no longer the largest coffee chain in China in terms of sales.

Jim Cramer shares his view on Starbucks stock

The multinational has lost that title to Xiamen-headquartered Luckin Coffee, as per the Wall Street Journal. With close to 11,000 stores in China, it is now the country’s biggest and fastest-growing chain of coffeehouses.

But famed investor Jim Cramer remains bullish as ever on “SBUX”.

He’s convinced that the Nasdaq-listed firm still has a massive opportunity in its second-largest market – and said he’d invest in Starbucks “hand over fist” because it’s a premium brand which means “no price competition”.  

What matters more than the total number of stores, as per the Mad Money host, is the “money they make” on each cup sold in China.

Starbucks could beat its full-year guidance

Jim Cramer is constructive on Starbucks stock because the management remains bullish on its Reinvention Plan.

He expects the Seattle-headquartered firm to beat its full-year guidance for a 5.0% to 7.0% annualised growth in its same-store sales in China.

“SBUX” will likely improve margins as well – as it executes on its commitment to cutting $3.0 billion in costs over the next three years, as per the Mad Money host.

His bullish view is in line with Wall Street that currently has a consensus “overweight” rating on Starbucks. A dividend yield of 2.19% makes up for another good reason to own this stock.