Starbucks (SBUX) reported better-than-expected second-quarter financial results on Tuesday, as same-store sales increased in China and globally. SBUX stock fell slightly late Tuesday.
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Seattle-based Megalith Coffee operates more than 36,000 stores worldwide. It has established itself as a giant in the field of coffee roasting and coffee trading. But she has recently dealt with turmoil.
Former CEO Howard Schultz in March ended his third stint at the helm of the company, his last on an interim basis. He was replaced by Laxman Narasimhan on 20 March, ahead of expected timing.
Meanwhile, since late 2021, workers at more than 280 Starbucks locations in the US have voted to unionize, prompting a flurry of media interest in unionization efforts in the US.
Starbucks stock was down about 1% on Tuesday evening. During regular market trading Tuesday, shares fell 0.1% to 114.46, near a 52-week high. SBUX broke out of a cup pattern with 110.93 official buy points on March 26th. Shares rose steadily ahead of earnings. SBUX stock is currently around 4% above the entry point of 110.93.
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Starbucks stock: earnings
estimatesAnalysts had expected earnings to rise 10% to 65 cents per share in the second quarter. Wall Street also saw revenue grow by 10% to $8.41 billion. Same-store sales were expected to grow 7.3 percent, a sequential increase from 5 percent in the first quarter and from 7 percent a year ago, according to FactSet.
resultsStarbucks reported revenue increased 14% to $8.7 billion in the second quarter. The company earned 74 cents per share, up 25% year-over-year. Meanwhile, global same-store sales jumped 11%, increased 12% in North America and 7% in the international market.
Same-store sales in China grew 3% as Starbucks opened 464 new stores worldwide in the second quarter, including 153 in China.
“From my overwhelming observations, our leadership team now has a clear line of sight into our growth area, as well as our opportunities to enhance margins and modernize the business, brand, partner experience and Starbucks culture,” Narasimhan said Tuesday in a statement. .
In early February, Starbucks narrowly missed first-quarter earnings and revenue estimates. Starbucks earned 75 cents per share on revenue of $8.71 billion in the first quarter.
The company blamed weak international demand. In China, Starbucks’ second-largest market, purchases at coffee shops that have been open for at least 13 months fell 28%.
China ended the zero covid policy during Starbucks’ first quarter. Schultz told investors that more than 1,800 of the then 6,090 Starbucks locations in China closed at the height of the Covid cases.
Despite subdued first-quarter performance from China, Starbucks executives maintained their prior guidance for 2023. Starbucks expects revenue growth of 10%-12% and adjusted EPS growth at the low end of 15% to 20% for fiscal 2023.
Starbucks stock ranked 19th in IBD’s retail restaurant industry group. The stock has a composite rating of 83 out of 99. SBUX has a rating of 94 for relative strength, which is an exclusive IBD stock check measure of share price movement. The EPS rating for Starbucks stock is 49.
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