Text size

Starbucks reported its latest quarterly earnings.

Christopher Furlong/Getty Images

Starbucks

stock fell early Wednesday after the coffee giant reported fiscal second-quarter earnings. The results offered both good and bad news, mirroring the uneven nature of the world’s vaccine rollouts and Covid-19 case counts.

Starbucks (ticker: SBUX) said it earned $659 million, or 56 cents a share, up from 28 cents a share in the year-ago period. On an adjusted basis, earnings were 62 cents a share. Revenue climbed 11% year over year to $6.67 billion. Analysts were looking for EPS of 53 cents on revenue of $6.78 billion.

Same-store sales climbed 15%, below the 17% consensus estimate. International comps jumped 35%, while domestic comps rose 9% in the quarter.  

Starbucks slipped 2.2% to $113.60 in recent trading. The shares have gained 8.6% year to date, and 51.1% in the past 12 months.

For the full year, Starbucks said it expects to earn an adjusted $2.90 to $3 a share, up from a previous range of $2.70 to $2.90 a share. The midpoint of that outlook is slightly below the per-share earnings of $2.98 that analysts are looking for, according to FactSet. Starbucks is looking for same-store sales growth of 18% to 23%, compared with the 22.4% consensus estimate.

It was certainly a mixed bag for the company. On the plus side, it continues to see a speedy recovery in the U.S., aided by rapid vaccine rollouts. Its margins, which on an adjusted basis nearly doubled to 16.1% in the quarter from 9.2% a year ago, are expanding at a rapid clip. In addition, the company said that active rewards membership jumped 18% to nearly 23 million in the quarter.

However, the international picture looks less robust. A slower vaccine rollout in Europe is weighing on Starbucks, much like many other retailers and restaurants, and some travel restrictions in China during the period also hurt results in that key market.

That echoes the company’s prior quarter, in which Starbucks’ top line missed expectations, due in large part to ongoing pandemic-related disruptions.

While the company’s full-year guidance fell slightly short of expectations, bulls are likely to view it as conservative.

Write to editors@barrons.com

Read More