Starbucks Meets Q2 Earnings Estimate, Comps Increase 3%

Starbucks Corp. SBUX just released its second-quarter fiscal 2017 financial results, posting earnings of 45 cents per share and revenues of $5.3 billion. Currently, SBUX is a #3 (Hold), and is down 3.4% to $59.20 per share in trading shortly after its earnings report was released.

Matched earnings estimates. The company reported earnings of 45 cents per share, matching the Zacks Consensus Estimate of 45 cents per share and increasing 15% year-over-year.

Missed revenue estimates. The company saw revenue figures of $5.3 billion, lagging behind our consensus estimate of $5.420 billion but growing 6% year-over-year.

During its second quarter, Starbucks said that comparable store sales increased 3% globally, 3% in the U.S., and 7% in China. Consolidated operating income increased 8% to $935 million, while consolidated operating margin expanded 40 basis points to 17.7%.

The company grew membership in its Starbucks Rewards program, up11% year-over-year to 13.3 million members, and Starbucks Rewards represented 36% of U.S. company-operated sales in Q2. Mobile Payment reached 29% of transactions, and Mobile Order and Pay grew to 8% of total transactions.

“With our U.S. business accelerating throughout the quarter and strong performance in China, we are poised to deliver strong revenue growth in the second half and into the future,” said Kevin Johnson, Starbucks president and ceo. “Our success in opening over 2,000 stores around the world annually, delivering record AUV and profit, despite a very difficult period for many brick-and-mortar retailers is a testament to the 330,000 partners who proudly wear the green apron.”

Here’s a graph that looks at Starbucks’ price, consensus, and EPS surprise:

Starbucks Corporation Price, Consensus and EPS Surprise

Starbucks Corporation Price, Consensus and EPS Surprise | Starbucks Corporation Quote

Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related equipment primarily through its company-operated retail stores. In addition to sales through its company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino coffee drinks and a line of premium ice creams through its joint venture partnerships.

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