Starbucks (SBUX) reported mixed results in the fiscal second quarter as the company posted revenues of $6.7 billion, up 11% year-on-year but lower than analysts’ expectations of $6.78 billion. The coffee chain reported adjusted non-GAAP earnings per share of $0.62 that came in ahead of consensus estimates of $0.53 per share.
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Starbucks’ President and CEO, Kevin Johnson said, “I am very pleased with our progress to date in fiscal 2021, as our second quarter results demonstrated impressive momentum in the business with full sales recovery in the U.S. Our strong results validate our ability to adapt to changes in our environment and the needs of our customers.”
SBUX reported comparable-store sales growth of 15% in 2Q that was driven by a 19% rise in average ticket. The company opened five new stores in fiscal 2Q and ended the quarter with 32,943 stores globally, 62% of which are in the United States and China.
The company also updated its FY21 outlook and expects revenues to range between $28.5 billion and $29.3 billion. This includes a $500 million impact of including a 53rd week in fiscal 2021.
SBUX has forecasted non-GAAP operating margin of 16.5% to 17.5% for FY21 and non-GAAP EPS to land between $2.90 and $3.00. The company also reiterated its FY21 guidance for global comparable sales growth across its stores of between 18% and 23%. (See Starbucks stock analysis on TipRanks)
On April 26, before the earnings release, Stifel Nicolaus analyst Christopher O’Cull raised the price target from $115 to $124 (7% upside potential) and reiterated a Buy rating on the stock. O’Cull said that investors would be looking at the rate of sales recovery in countries like the United States and China and indications that margins could improve more quickly than management’s guidance.
As a result, the analyst also believed that management would update the full-year guidance.
Shares have rallied 5.33% in the past month. Overall, consensus on the Street is that SBUX is a Moderate Buy based on 13 Buys and 7 Holds. The average analyst price target of $121.76 implies upside potential of about 4.8% to current levels.
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