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Will ETFs Gain on Starbucks' Q2 Earnings Beat Amid Pandemic?
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Starbucks Corporation (SBUX - Free Report) released second-quarter fiscal 2021 results, after market close, on Apr 27. The company’s earnings topped estimates while revenues lagged the same. However, the metrics rose year over year amid the pandemic. Notably, shares of Starbucks have declined 1.3% since the earnings release, largely due to revenues missing analyst’s estimates.
Earnings in Detail
Starbucks reported adjusted earnings of 62 cents per share, surpassing the consensus mark of 52 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 32 cents. Notably, the bottom line surpassed the Zacks Consensus Estimate for the sixth straight quarter. Revenues rose nearly 11.2% year over year to nearly $6.67 billion but lagged the Zacks Consensus Estimate of $6.80 billion. The upside was primarily driven by growth in comparable store sales, partially offset by the unfavorable impact of Global Coffee Alliance transition-related activities.
Business Update
Starbucks opened five net new stores worldwide in the fiscal second quarter, taking the total tally to 32,943. Global store growth was 3% on a year-over-year basis.
Meanwhile, global comparable store sales rose 15% year over year. Global comps were up on a 19% increase in average ticket, marginally offset by a 4% decline in comparable transactions.
The company’s Active Starbucks Rewards loyalty program expanded to 22.9 million active members in the United States, up 18% on a year-over-year basis.
Guidance
Starbucks has updated its fiscal 2021 GAAP earnings guidance. Management noted that fiscal year 2021 is a 53-week year instead of the normal 52 weeks. The company continues to expect global comparable sales growth between 18% and 23% in fiscal 2021.
Moreover, fiscal year 2021 earnings are expected in the range of $2.90-$3.00 compared with the previous estimate of $2.70-$2.90. The company projects consolidated revenues in the range of $28.5-$29.3 billion, inclusive of a $500-million impact attributable to the 53rd week.
ETFs in Focus
Investors might want to take a look at a few ETFs, which have notable exposure to Starbucks and can cash in on the coffee giant’s earnings results:
iShares Evolved U.S. Consumer Staples ETF — 4.49% exposure to Starbucks
It is an actively-managed fund which employs data science techniques to identify companies with exposure to the consumer staples sector. The fund comprises 122 holdings. Its AUM is $14.5 million and expense ratio is 0.18%. The fund has returned around 0.9% since the coffee giant’s earnings release (read: Coke, PepsiCo Earnings Should Help Staples ETFs).
The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) — 3.45% exposure
The fund tracks the Consumer Discretionary Select Sector Index and comprises 63 holdings. The fund’s AUM is $20.56 billion and expense ratio is 0.12%. The fund has lost 0.09% since Starbucks’ earnings release (read: Amazon Posts Biggest Profit Ever With a Huge Beat: ETFs to Tap).
This fund tracks the MSCI USA IMI Consumer Discretionary Index. The fund’s AUM is $1.63 billion and expense ratio is 0.08%. However, it has lost around 0.07% since the coffee giant’s earnings release (read: ETFs to Shine Bright on Upbeat US Consumer Confidence in April).
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. The fund’s AUM is $6.17 billion and expense ratio is 0.10%. The fund has almost remained flat since Starbucks’ earnings release.
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Will ETFs Gain on Starbucks' Q2 Earnings Beat Amid Pandemic?
Starbucks Corporation (SBUX - Free Report) released second-quarter fiscal 2021 results, after market close, on Apr 27. The company’s earnings topped estimates while revenues lagged the same. However, the metrics rose year over year amid the pandemic. Notably, shares of Starbucks have declined 1.3% since the earnings release, largely due to revenues missing analyst’s estimates.
Earnings in Detail
Starbucks reported adjusted earnings of 62 cents per share, surpassing the consensus mark of 52 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 32 cents. Notably, the bottom line surpassed the Zacks Consensus Estimate for the sixth straight quarter. Revenues rose nearly 11.2% year over year to nearly $6.67 billion but lagged the Zacks Consensus Estimate of $6.80 billion. The upside was primarily driven by growth in comparable store sales, partially offset by the unfavorable impact of Global Coffee Alliance transition-related activities.
Business Update
Starbucks opened five net new stores worldwide in the fiscal second quarter, taking the total tally to 32,943. Global store growth was 3% on a year-over-year basis.
Meanwhile, global comparable store sales rose 15% year over year. Global comps were up on a 19% increase in average ticket, marginally offset by a 4% decline in comparable transactions.
The company’s Active Starbucks Rewards loyalty program expanded to 22.9 million active members in the United States, up 18% on a year-over-year basis.
Guidance
Starbucks has updated its fiscal 2021 GAAP earnings guidance. Management noted that fiscal year 2021 is a 53-week year instead of the normal 52 weeks. The company continues to expect global comparable sales growth between 18% and 23% in fiscal 2021.
Moreover, fiscal year 2021 earnings are expected in the range of $2.90-$3.00 compared with the previous estimate of $2.70-$2.90. The company projects consolidated revenues in the range of $28.5-$29.3 billion, inclusive of a $500-million impact attributable to the 53rd week.
ETFs in Focus
Investors might want to take a look at a few ETFs, which have notable exposure to Starbucks and can cash in on the coffee giant’s earnings results:
iShares Evolved U.S. Consumer Staples ETF — 4.49% exposure to Starbucks
It is an actively-managed fund which employs data science techniques to identify companies with exposure to the consumer staples sector. The fund comprises 122 holdings. Its AUM is $14.5 million and expense ratio is 0.18%. The fund has returned around 0.9% since the coffee giant’s earnings release (read: Coke, PepsiCo Earnings Should Help Staples ETFs).
The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) — 3.45% exposure
The fund tracks the Consumer Discretionary Select Sector Index and comprises 63 holdings. The fund’s AUM is $20.56 billion and expense ratio is 0.12%. The fund has lost 0.09% since Starbucks’ earnings release (read: Amazon Posts Biggest Profit Ever With a Huge Beat: ETFs to Tap).
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) — 2.52% exposure
This fund tracks the MSCI USA IMI Consumer Discretionary Index. The fund’s AUM is $1.63 billion and expense ratio is 0.08%. However, it has lost around 0.07% since the coffee giant’s earnings release (read: ETFs to Shine Bright on Upbeat US Consumer Confidence in April).
Vanguard Consumer Discretionary ETF (VCR - Free Report) — 2.51% exposure
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. The fund’s AUM is $6.17 billion and expense ratio is 0.10%. The fund has almost remained flat since Starbucks’ earnings release.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>