Earnings Preview: Starbucks Corporation (SBUX)
By:NewsyStocks   Thursday, January 26, 2022 3:09 PM



Starbucks is scheduled to release its first quarter results for fiscal year 2012 today after the closing bell. Over the last year, the company is massively expanded its product selection in its grocery segment and is also looking into the health and wellness market with the acquisition of Evolution Fresh, a juice maker.

Fourth quarter analyst estimates for Starbucks range from $0.46 to $0.52, with a consensus estimate of $0.49, an increase of 5 percent year-over-year. Revenue for the period is expected to be $3.3 billion – up 11.5 percent compared to the year-ago period.

Merrill Lynch estimates that same store sales in the United States will be up 6 percent and 7 percent internationally. It also stated that the company could face higher startup costs for its K-cup line but the product seems to have been well received in its first quarter.

Merrill Lynch reiterated its neutral stance on the stock but increased its price target from $48 to $52. It cited the company's new growth mode as the main factor for this adding the Starbucks has been able to achieve this at a time of rising costs implying higher earnings power.

The company's operating margin is expected to be around 16.2 percent, declining 80bp year-over-year.

Fourth Quarter Results & Earnings History

Net profits grew 29 percent to $358.5 million or $0.47 per share. Revenues rose 7 percent to a record $7 billion.

The company also reported that same store sales for the quarter grew 9 percent worldwide – with a 6 percent rise in traffic and 3 percent on the average ticket.

In the last 3 reported quarters, the company has posted profit growth of 20.4 percent, 34.2 percent, and 28.5 percent respectively.

Our Take

Starbucks's new trajectory will be a promising sign for investors going into 2012 as its expansion seems on the right path. Investors will be keen for further guidance on the direction of the company's non-coffee segments which now spans groceries, wine, and packaged goods.

 

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