Starbucks Reports Mixed Q1 Results

Coffeehouse chain operator Starbucks Corporation (NASDAQ: SBUX) has reported mixed results for the fiscal first quarter ended January 2, 2022.

Following the earnings, shares of the company declined marginally to close at $97.93 in Tuesday’s extended trading session.

Revenue & Earnings

Starbucks reported quarterly net revenues of $8.1 billion, which denotes a rise of 19.3% from the previous year. Further, the figure surpassed the consensus estimate of $7.97 billion. The growth in revenues can be attributed to 38.6% and 17.4% year-over-year growth witnessed in revenues from licensed stores and company-operated stores to $850.8 million and $6.7 billion, respectively.

The company’s quarterly earnings per share (EPS) stood at $0.72, up 18% from the year-ago period. However, the figure failed to surpass the consensus estimate of $0.79 per share.

Other Operating Metrics

The company’s global comparable-store sales rose 13% from the prior year driven by a 10% rise in comparable transactions and a 3% increase in average ticket.

The company also opened 484 net new stores in the first quarter of fiscal 2022, ending the quarter with 34,317 stores globally.

CEO’s Comments

The CEO of Starbucks, Kevin Johnson, said, “This holiday quarter delivered strong revenue growth highlighted by incredible customer demand for Starbucks. As we enter the third year of this pandemic, our stores continue to play an important role as a community gathering place that offers safe, familiar and convenient experiences for our customers.

“Although demand was strong, this pandemic has not been linear, and the macro environment remains dynamic as we experienced higher-than-expected inflationary pressures, increased costs due to Omicron and a tight labor market. We remain focused on actions that drive both top and bottom line growth, including industry-leading investments to attract, train and retain the best talent for our stores as customer occasions increase.”

Stock Rating

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 5 Buys, 7 Holds and 1 Sell. The average Starbucks price target of $121.80 implies that the stock has upside potential of 23.33% from current levels. Shares have declined about 2.8% over the past year.

News Sentiment

News Sentiment for SBUX is Very Positive based on 60 articles over the past seven days. 100% of the articles have Bullish sentiment, compared to the sector average of 62%.

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