$Starbucks(SBUX)$ Starbucks Corporation SBUX is scheduled to report second-quarter fiscal 2022 results on May 3, after the closing bell. In the last reported quarter, the company delivered an earnings miss of 10%.
Q2 Estimates
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 60 cents per share, indicating a decline of 3.2% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues stands at $7.61 billion, suggesting growth of 14.1% from the year-ago quarter.
The company’s fiscal second-quarter performance is likely to have benefited from robust comps growth and digitalization. Increase in transaction and average ticket growth might have favored comps growth in the quarter to be reported. The company has been gaining from increase in 90-day active Starbucks Rewards members. The company continues to gain from strong expansion efforts. Starbucks expects to open nearly 2,000 net new stores worldwide in fiscal 2022.
Robust North America segment sales are likely to have driven the company’s top line. The Zacks Consensus Estimate for revenues for North America and International segments is pegged at $5,307 million and $1,875 million, suggesting year-over-year improvement of 13.8% and 16.4%, respectively.
China and the Asia-Pacific regions have been gaining from unit growth, rising brand awareness and increased usage of the digital/mobile/loyalty platforms. In the past year, mobile order sales have doubled in China. The company has been gaining from unit growth, rising brand awareness and increased usage of the digital/mobile/loyalty platforms. In the past year, mobile order sales have doubled in China. The company has been gaining from its partnership with Beyond Meat to roll out a plant-based lunch menu in China. However, pandemic-induced restrictions might have weighed on the company’s performance in China in the quarter to be reported.
Resurgence in coronavirus cases in some parts of the world may have hurt the to-be-reported quarter’s performance. The pandemic is likely to have impacted the company’s traffic in the quarter. High costs inflation might have affected the company’s margin. The expiration of government subsidies in Asia and the transition of Starbucks Korea to the licensee are likely to hurt the company’s margin in fiscal 2022.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Starbucks has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of -4.18%.
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