Key Takeaways
- The Estimize consensus is calling for EPS of $0.40 on revenue expectations of $5.04, 1 cent higher than Wall Street on the bottom line and $30 million on top
- Last quarter, same store sales grew 8% largely drive by a 4% increase in customer traffic over the period
- Starbucks Corporation (NASDAQ:SBUX) is prepared to open stores in Italy this year as part of its aggressive international expansions plan.
Coffee brewer, Starbucks (NASDAQ:SBUX), is scheduled to report fiscal second quarter Thursday, after the market closes. While spelling is not their strongest suit, Starbucks can certainly sell coffee. In the past 2 fiscal years, both EPS and revenue have steadily increased despite one small roadblock in FQ2 2015. Earnings during this time have been largely in line with expectations with no significant beats or losses. This quarter, the Estimize consensus is calling for EPS of $0.40 on revenue expectations of $5.04, 1 cent higher than Wall Street on the bottom line and $30 million on top. Compared to a year earlier, earnings are forecasted to grow 21% on an 11% increase in revenue. Given the upward trend it’s not surprising that the stock is a big mover during earnings season. Leading up to its call shares have typically increased 2% and slowly tailed off to 1% in the moments following its report.
As with most retailers, the most important number to watch is same store sales, which Starbucks grew by a whopping 8% last quarter. Impressive comps were driven by a 4% increase in customer traffic over the period. CEO Howard Schultz only expects traffic to improve thanks to increased lunch offerings, a popular loyalty program and digital ordering capabilities. Add to that an aggressive international expansion plan which aims to open up 500 new locations in China alone this year. The company is also bullish on India in the long term, although growth there has been relatively slow. Recent success in the consumer packaged goods (CPG) segment, which sells single-serve beverages and packaged coffees in grocery stores and other retail outlets, should also drive growth. This division was up 16% last quarter, officially making it the second largest retailer of packaged coffee behind Kraft Heinz Co (NASDAQ:KHC).
