Back to top

Image: Bigstock

Starbucks (SBUX) Hikes Long-term Guidance, Shares Rise

Read MoreHide Full Article

Shares of Starbucks Corporation (SBUX - Free Report) increased more than 4% in after-hour trading session on Dec 9 after the company reiterated fiscal 2021 guidance and provided upbeat long-term view.

The company announced that it continues to wintness recovery from the coronavirus pandemic and the trend is likely to sustain in fiscal 2021. Starbucks continues to expect GAAP earnings per share in the range of $2.34 to $2.54 in fiscal 2021, while non-GAAP earnings are likely to be between $2.70 and $2.90 (both inclusive of a $0.10 impact attributable to the 53rd week).

Moreover, for fiscal 2020, the company anticipates non-GAAP earnings per share growth of at least 20%, which includes the negative impact of lapping a 53-week year. For fiscal 2023 and 2024, the company expects non-GAAP earnings growth in the range of 10% to 12%, up from the prior estimate of growth of 10%.

The company expects global store growth to be nearly 6% annually starting in fiscal 2022, down from the prior estimate of 6% to 7%.

Robust Comps Growth Estimate

Starbucks projects the company-operated comparable store sales growth in the U.S. and globally in fiscal 2023 in the range of 4% to 5%, up from the prior estimate of 3% to 4%. Comparable store sales will benefit from investment in retail store partners and robust digitalization. In China, the company anticipates comparable store sales growth of 2% to 4% in fiscal 2023, compared with the prior estimate of 1% to 3%.

CEO Kevin Johnson said "Over the past two years, we have further streamlined the company, sharpened our focus on accelerating growth in our two lead markets of the U.S. and China, and expanded our global reach through the Global Coffee Alliance with Nestlé while increasing returns to all of our stakeholders.”

Shares of the company have gained 38.3% in the past six months, compared with the industry’s growth of 22.2%. Starbucks currently carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks worth considering in the same space, include Jack in the Box Inc. (JACK - Free Report) , Darden Restaurants, Inc. (DRI - Free Report) and Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Jack in the Box earnings for fiscal 2021 is likely to witness growth of 20.2%.

Darden Restaurants has a three-five year earnings per share growth rate of 19.5%.

Shares of Red Robin Gourmet Burgers have gained 70.2% in the past three months.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Published in