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How Are ETFs Reacting to Starbucks' Q1 Earnings Results?
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Starbucks Corporation (SBUX - Free Report) released first-quarter fiscal 2022 results on Feb 1, after market close. The company’s earnings missed estimates while revenues surpassed the same. However, the metrics rose year over year despite the pandemic. Shares of Starbucks have declined about 1% since the earnings release.
Earnings in Detail
Starbucks reported adjusted earnings per share (EPS) of 72 cents, lagging the Zacks Consensus Estimate of 80 cents. In the prior-year quarter, the company had reported adjusted earnings of 61 cents per share. Revenues rose nearly 19.3% year over year to around $8.05 billion and surpassed the Zacks Consensus Estimate of $8 billion. The upside was largely supported by strength in comparable-store sales backed by the lapping of business disruption in the prior year due to the COVID-19 pandemic. Also, the solid performance of new U.S. company-operated stores (part of the North America Trade Area Transformation initiative) provided support.
Business Update
Starbucks opened 484 net new stores worldwide in the fiscal first quarter, taking the total tally to 34,317. Global store growth was 4% on a year-over-year basis.
Meanwhile, global comparable-store sales rose 13% year over year. Global comps improved on a 10% increase in comparable transactions along with a 6% rise in average ticket.
The company’s Active Starbucks Rewards loyalty program expanded to 26.4 million active members in the United States, up 21% on a year-over-year basis.
Guidance
Starbucks expects global comparable sales to reach high-single digits in fiscal 2022. The company projects to open around 2,000 net new stores globally in fiscal 2022, up from 1,173 store openings reported in fiscal 2021. Consolidated revenues for fiscal 2022 are expected between $32.5 billion and $33 billion.
For fiscal 2022, the company anticipates non-GAAP EPS growth in the range of 8-10% from the base of $3.10 in fiscal 2021 (the figure is adjusted for non-GAAP treatment of certain integration costs and excludes the involvement of an extra week).
ETFs in Focus
Investors might want to take a look at a few ETFs, which have notable exposure to Starbucks and can seem impacts from the coffee giant’s earnings results:
iShares Evolved U.S. Consumer Staples ETF — 3.62% exposure to Starbucks
It is an actively-managed fund that employs data science techniques to identify companies with exposure to the consumer staples sector. The fund comprises 128 holdings. Its AUM is $16.8 million and expense ratio is 0.18%. The fund has returned around 0.7% since Starbucks’ earnings release (read: ETF Strategies to Beat Inflation & Follow Warren Buffett).
The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) — 3.05% exposure
The fund tracks the Consumer Discretionary Select Sector Index and comprises 60 holdings. The fund’s AUM is $19.99 billion and expense ratio is 0.10%. However, it has lost around 0.6% since Starbucks’ earnings release (read: ETFs in Focus as Amazon Gears Up for Q4 Earnings).
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. The fund’s AUM is $6.23 billion and expense ratio is 0.10%. The fund has declined 0.7% since Starbucks’ earnings release (read: Will ETFs Suffer as US Consumer Confidence Weakens in January).
This fund tracks the MSCI USA IMI Consumer Discretionary Index. Its AUM is $1.59 billion and expense ratio is 0.08%. However, it has been down around 0.7% since the coffee giant’s earnings release (read: Tesla Posts Record Q4 Revenues: ETFs in Focus).
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How Are ETFs Reacting to Starbucks' Q1 Earnings Results?
Starbucks Corporation (SBUX - Free Report) released first-quarter fiscal 2022 results on Feb 1, after market close. The company’s earnings missed estimates while revenues surpassed the same. However, the metrics rose year over year despite the pandemic. Shares of Starbucks have declined about 1% since the earnings release.
Earnings in Detail
Starbucks reported adjusted earnings per share (EPS) of 72 cents, lagging the Zacks Consensus Estimate of 80 cents. In the prior-year quarter, the company had reported adjusted earnings of 61 cents per share. Revenues rose nearly 19.3% year over year to around $8.05 billion and surpassed the Zacks Consensus Estimate of $8 billion. The upside was largely supported by strength in comparable-store sales backed by the lapping of business disruption in the prior year due to the COVID-19 pandemic. Also, the solid performance of new U.S. company-operated stores (part of the North America Trade Area Transformation initiative) provided support.
Business Update
Starbucks opened 484 net new stores worldwide in the fiscal first quarter, taking the total tally to 34,317. Global store growth was 4% on a year-over-year basis.
Meanwhile, global comparable-store sales rose 13% year over year. Global comps improved on a 10% increase in comparable transactions along with a 6% rise in average ticket.
The company’s Active Starbucks Rewards loyalty program expanded to 26.4 million active members in the United States, up 21% on a year-over-year basis.
Guidance
Starbucks expects global comparable sales to reach high-single digits in fiscal 2022. The company projects to open around 2,000 net new stores globally in fiscal 2022, up from 1,173 store openings reported in fiscal 2021. Consolidated revenues for fiscal 2022 are expected between $32.5 billion and $33 billion.
For fiscal 2022, the company anticipates non-GAAP EPS growth in the range of 8-10% from the base of $3.10 in fiscal 2021 (the figure is adjusted for non-GAAP treatment of certain integration costs and excludes the involvement of an extra week).
ETFs in Focus
Investors might want to take a look at a few ETFs, which have notable exposure to Starbucks and can seem impacts from the coffee giant’s earnings results:
iShares Evolved U.S. Consumer Staples ETF — 3.62% exposure to Starbucks
It is an actively-managed fund that employs data science techniques to identify companies with exposure to the consumer staples sector. The fund comprises 128 holdings. Its AUM is $16.8 million and expense ratio is 0.18%. The fund has returned around 0.7% since Starbucks’ earnings release (read: ETF Strategies to Beat Inflation & Follow Warren Buffett).
The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) — 3.05% exposure
The fund tracks the Consumer Discretionary Select Sector Index and comprises 60 holdings. The fund’s AUM is $19.99 billion and expense ratio is 0.10%. However, it has lost around 0.6% since Starbucks’ earnings release (read: ETFs in Focus as Amazon Gears Up for Q4 Earnings).
Vanguard Consumer Discretionary ETF (VCR - Free Report) — 2.32% exposure
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. The fund’s AUM is $6.23 billion and expense ratio is 0.10%. The fund has declined 0.7% since Starbucks’ earnings release (read: Will ETFs Suffer as US Consumer Confidence Weakens in January).
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) — 2.28% exposure
This fund tracks the MSCI USA IMI Consumer Discretionary Index. Its AUM is $1.59 billion and expense ratio is 0.08%. However, it has been down around 0.7% since the coffee giant’s earnings release (read: Tesla Posts Record Q4 Revenues: ETFs in Focus).