Starbucks

Starbucks’ (SBUX) recent stock underperformance comes as it faces traffic challenges that appear to be in early stages, Oppenheimer said in a note emailed Tuesday. After attempting to identify an upgrade thesis with shares of the coffee chain down 13% since May versus a 9% improvement for the S&P 500, the brokerage said it decided to remain sidelined with a perform rating. An upgrade would require “uncovering a reversal in earnings revisions that is primarily traffic driven,” analysts Brian Bittner and Michael Tamas wrote. Starbucks’ traffic headwinds “appear in early innings and more related to price/value concerns, competition, and operations than perceived,” they said. Oppenheimer lowered its 2024 earnings per share estimate to $3.56 from $3.60 and its 2025 target to $3.99 from $4.12. Those reductions put the analysts’ forecast below the Street’s view of $3.58 and $4.04, respectively, the report showed. The brokerage said Wall Street’s 13% EPS growth

The following is a summary of the Starbucks Corporation (SBUX) Q2 2024 Earnings Call Transcript: Financial Performance: Starbucks reported Q2 total company revenue of $8.6 billion, a decrease of 1% year-over-year. Global comparable store sales declined 4% year-over-year due to a 3% negative growth in North America and an 11% negative growth in China. The company’s operating margins contracted by 140 basis points to 12.8%, and earnings per share decreased by 7% to $0.68. The consolidated operating margin contracted 140 basis points from the prior year to 12.8%. Q2 Earnings Per Share (EPS) was $0.68, indicating a decrease of 7% from the previous year. The channel development segment’s revenue was $418 million in Q2, marking a 13% decline from the previous year. Business Progress: The Mobile Order & Pay system represented 31% of all transactions in the quarter, setting a new record. Starbucks Rewards members in the U.S grew by

Starbucks (SBUX) shares sank more than 12% in premarket activity Wednesday after the company reported fiscal Q2 adjusted earnings and sales that missed the market’s expectations. The company reported fiscal Q2 non-GAAP earnings late Tuesday of $0.68 per share, down from $0.74 a year earlier. Analysts polled by Capital IQ expected $0.80 Net revenue for the quarter ended March 31 was $8.56 billion, down from $8.72 billion a year earlier. Analysts surveyed by Capital IQ expected $9.16 billion. Comparable-store sales during the quarter were down 4% worldwide, the company said. Analysts polled by Capital IQ expected 1% growth.

By Claudia Assis CEO cites ‘disappointing’ performance as same-store sales slide worldwide Starbucks Corp. spooked investors late Tuesday, detailing how a trifecta of fewer people at its stores, cautious consumers and fiercer competition for a morning joe hit its quarterly revenue, and sank the stock more than 9% in the after-hours session. “Let me be clear from the beginning, our performance this quarter was disappointing and did not meet our expectations,” Chief Executive Laxman Narasimhan said on a call with analysts after the results were released. “A deteriorating economic outlook” in several markets has weighed on customer traffic and the impact is felt broadly across the industry, the CEO said. The company reported sliding comparable-store sales across the globe, only in part offset by higher tickets. In key markets, including the U.S., declining foot traffic is a problem, as consumers – particularly the occasional customer- continue to be “cautious,” Narasimhan

Investors are wary of many headwinds facing Starbucks ahead of its earnings report on Tuesday. A potential new summer drink with fruit flavored pearls — similar to bubble tea — could bring some fresh momentum to the coffee chain. For Starbucks’ second fiscal quarter ended in March, analysts polled by FactSet expect the coffee chain to post 80 cents per-share earnings and $9.1 billion in sales, marking 8.1% and 4.6% growth, respectively, from the same quarter a year ago. The company missed first-quarter earnings expectations and lowered its revenue guidance for the rest of the fiscal year. Management expects sales to grow between 7% and 10% year-over-year in 2024, down from the previous forecast of 10% to 12%. Pressure from inflation will continue in 2024, especially as California boosted the minimum wage for fast-food workers from $16 to $20 per hour. According to data from Gordon Haskett, Starbucks raised prices

Starbucks remains well positioned despite current pressures, UBS analysts say in a research note. The coffee chain has a strong customer brand affinity and attractive growth profile. The U.S. challenges largely reflect a combination of Middle East conflict-related protests and consumer spending pressures, while China macro conditions and competition represent overhangs, the analysts say. These pressures are expected to weigh on Starbucks’ results. UBS lowers its 2Q North America same store sales to flat from an increase of 3%, and its international estimates to a decline of 2% from prior flat expectations. It also cuts its 2Q and FY EPS forecasts to 78 cents and $3.94, previously, noting that sales headwinds likely persisted in the 2Q.

Starbucks’ (SBUX) 2024 outlook will likely be affected by near-term pressures, but it remains well-positioned in the long term due to “strong customer brand affinity and an attractive growth profile,” UBS said in a note emailed Tuesday. Challenges in the US stem from protests related to Middle East conflict and pressure on consumer spending, while China’s macro conditions and competition are adding to concerns, according to the note. The firm said results from its survey on brand image, customer traffic, and sales trends and growth found Starbucks still has a strong brand reputation and opportunities to improve sales in the future. UBS said it expects Starbucks to reduce its fiscal 2024 same-store sales and revenue growth. Earnings will also decrease as cost-saving measures will not be able to maintain the current earnings target, the firm added. UBS reduced the price target for Starbucks to $95 from $105, while keeping the

Jefferies analyst Andy Barish maintains Starbucks (NASDAQ:SBUX) with a Hold and lowers the price target from $100 to $94.

Citigroup analyst Jon Tower maintains Starbucks (NASDAQ:SBUX) with a Neutral and lowers the price target from $102 to $95.

Wells Fargo analyst Zachary Fadem maintains Starbucks (NASDAQ:SBUX) with a Overweight and maintains $105 price target.

JP Morgan analyst John Ivankoe maintains Starbucks (NASDAQ:SBUX) with a Overweight and lowers the price target from $107 to $100.