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Starbucks Corporation

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Starbucks reported second-quarter fiscal 2018 results, wherein earnings met the Zacks Consensus Estimate while revenues surpassed the same. Notably, Starbucks reported in-line earnings in three of the last four quarters. Nonetheless, adjusted earnings grew 17.8% year over year. Total sales also increased 13.9%. The results benefited from an improved performance in the Americas segment (mainly in the United States), the ongoing momentum in China (following the takeover of East China) and strongest comps growth in Japan in five quarters. Notably, the acquisition of the East China business and other portfolio reshuffling activities lent a 3% net benefit to its top line. However, adjusted operating margin declined 170 basis points (bps) on higher partner investments and food-related mix shift. That said, Starbucks inked a deal with Nestle that will dramatically expand its global reach and add to its bottom line by the end of fiscal 2021 or sooner.


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