Investing.com - Starbucks rallied Friday, lifting consumer discretionary stocks as the coffee giant's frothy quarterly report was welcomed by investors.
Starbucks (NASDAQ:SBUX) reported late Thursday fiscal first-quarter revenue and earnings that topped analysts' expectations, sending its share price more than 2% higher.
Global same-store sales rose by 4%, above consensus estimates for a 3% increase.
The coffee chain guided full-year profit above market expectations on the back of strong growth in the U.S. and improved performance in China.
Starbucks said that it expects fiscal 2019 adjusted earnings per share to come in the range of $2.68 to $2.73, above market forecasts of $2.65.
The upbeat report somewhat validates CEO Kevin Johnson's plans, including the sale of the company's products business to Nestle.
"We see Starbucks well on track with its 3-year target return about $25 billion to its shareholders by the full 2020," said CFRA, an independent research provider.
"We are cautiously optimistic on a new partnership in China with Alibaba (NYSE:BABA) and a global strategic licensing pact with Nestle, which recently raised about $5B of upfront proceeds for share buybacks," it added.
The S&P 500 Consumer Discretionary sector rallied more than 2%.