The ratings on Seattle-based Starbucks Corp. are based on Standard&Poor's Ratings Services' expectation that good performance will continue through 2011 as the company benefits from operational improvements and a recovering U.S. economy. We view Starbucks' business profile as satisfactory, reflecting its leading market position and excellent brand recognition in the specialty coffee market. However, we view this industry segment as vulnerable to economic downturns and lack of discretionary spending; it is also increasingly competitive as many players are introducing better quality coffee products. We assess Starbucks financial risk profile as modest, supported by its strong liquidity position, improving credit metrics, and strong cash flow generation. Following weak sales trends in 2008 and 2009, Starbucks performance has improved and
