Starbucks Corporation (NASDAQ: NASDAQ:SBUX)
Starbucks, the ubiquitous coffee shop in many urban and suburban American cities, where customers can get anything from coffee to tea to snacks and protein lattes, reported their fiscal fourth quarter earnings on Thursday November 2, 2017 after the market closed.
However, the company’s share price did not act like it had an infusion of caffeine and rip higher. In fact, it did the opposite and dropped like a rock when the company announced poor earnings, poor guidance, and the sale of a division that they had hoped would bring in extra revenue from the tea section of their business.
The company announced it will be selling the tea division called Tazo. This is the area that focuses on tea and tea products. Starbucks bought it for about 8 million dollars back in 1999.
Earning Numbers
While Starbucks’ numbers weren’t horrendous, they didn’t meet analyst expectations. Earnings came in at $0.54 a share but analysts had been expecting $0.55 on sales of 5.8 billion dollars. The current quarter only saw $5.7 billion dollars in sales. The company received approximately $384 million dollars for the sale of the Tazo Tea division.
Shares closed down in the regular training session only -$0.26 however, they closed down an additional -$2.72 after the market closed. Shares closed at $53.15 as of 8 p.m. Eastern Daylight time which is down -3.13%.
One attraction to the shares for longer-term investors on Friday may be that the stock does have a dividend attached to ownership of it. The dividend is about 1.82% per year which is not bad given what you can currently with your cash sitting in the bank earnings interest.
Company Comments
Kevin Johnson, ceo and president had this to say after the earnings were released:
“Today, Starbucks reported another quarter – and year – of strong performance, with each of our business segments around the world contributing to record results. Food, beverage and digital innovation are bringing customers into our stores at the same time as ongoing operational improvements are enabling us to drive increased throughput – particularly in our busiest stores at peak – and deliver a further elevated Starbucks Experience to our customers.”
Scott Maw, CFO had this to add:
“Starbucks delivered solid top and bottom line growth – and our strongest quarterly traffic number in the U.S. since mid-2016 – despite a difficult operating environment in both the quarter and year. Continued strong growth and performance from CAP demonstrates that Starbucks now has two significant profit engines driving our global returns, our North America business and the broader CAP market.”
Starbucks Charts
The above price chart shows the regular trading session on the left and the aftermarket session on the right. Both are five minute time frame intervals.
The above price chart shows the daily action going back roughly 6 to 7 months. Note the red oval area where shares will likely open for training on Friday morning.
Company Profile
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development.
Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices, and bottled water; an assortment of fresh food and snack offerings; and various food products, such as pastries, breakfast sandwiches, and lunch items, as well as beverage-making equipment and accessories.
The company also licenses its trademarks through licensed stores, and grocery and national foodservice accounts. It offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, and Starbucks VIA brand names. As of November 3, 2016, the company operated 25,085 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington