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Starbucks (SBUX) Gears Up for Q1 Earnings: What's in Store?
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Starbucks Corporation (SBUX - Free Report) is scheduled to report its first-quarter fiscal 2023 results on Feb 2, after the closing bell. In the last reported quarter, the company delivered an earnings beat of 11%.
Q1 Estimates
The Zacks Consensus Estimate for earnings is pegged at 77 cents per share, indicating growth of 6.9% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The Zacks Consensus Estimate for revenues is pegged at $8.8 billion, suggesting growth of 9.3% from the year-ago quarter.
Factors to Note
Robust comps growth, expansion efforts and solid North America sales are likely to have aided the company’s top line in the to-be-reported quarter. The company has also been benefiting from growth in company-operated comparable store sales, new store growth and higher contribution from licensed store sales.
We expect North America sales and Channel Development sales to be $6,276.6 million and $468.4 million, up 9.5% and 12.3% year over year, respectively. The company is gaining from increase in transactions and average ticket growth.
However, a decline in international sales is likely to have negatively impacted the company’s performance. We expect international sales to be $1,859.3 million, down 0.9% year over year. The dismal performance in China is likely to have adversely impacted the company’s international sales.
Inflationary pressures and increased investments in store partner wages and benefits are likely to have affected the margin in the quarter-to-be reported. We expect the adjusted operating margin in first-quarter fiscal 2023 to be 14.5% compared with 15.1% reported in the prior-year quarter. Moreover, we expect total operating expenses to be $4,747.9 million, up 8.3% from the prior-year quarter.
Our proven model predicts 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 +1.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks Poised to Beat Estimates
Here are some other stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these too have the right combination of elements to beat on earnings this season:
Yum! Brands, Inc. (YUM - Free Report) currently has an Earnings ESP of +2.14% and a Zacks Rank #2.
Shares of Yum! Brands have gained 2.4% in the past year. YUM has a trailing four-quarter earnings surprise of negative 3.7% on average.
Yum China Holdings, Inc. (YUMC - Free Report) currently has an Earnings ESP of +7.14% and a Zacks Rank #2.
Shares of Yum China have increased 29.2% in the past year. YUMC’s has a trailing four-quarter earnings surprise of 263.4%, on average.
Shake Shack Inc. (SHAK - Free Report) has an Earnings ESP of +8.08% and a Zacks Rank #3.
Shares of Shake Shack have declined 14.5% in the past year. SHAK’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 37.2%, on average.
Image: Bigstock
Starbucks (SBUX) Gears Up for Q1 Earnings: What's in Store?
Starbucks Corporation (SBUX - Free Report) is scheduled to report its first-quarter fiscal 2023 results on Feb 2, after the closing bell. In the last reported quarter, the company delivered an earnings beat of 11%.
Q1 Estimates
The Zacks Consensus Estimate for earnings is pegged at 77 cents per share, indicating growth of 6.9% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The Zacks Consensus Estimate for revenues is pegged at $8.8 billion, suggesting growth of 9.3% from the year-ago quarter.
Factors to Note
Robust comps growth, expansion efforts and solid North America sales are likely to have aided the company’s top line in the to-be-reported quarter. The company has also been benefiting from growth in company-operated comparable store sales, new store growth and higher contribution from licensed store sales.
We expect North America sales and Channel Development sales to be $6,276.6 million and $468.4 million, up 9.5% and 12.3% year over year, respectively. The company is gaining from increase in transactions and average ticket growth.
However, a decline in international sales is likely to have negatively impacted the company’s performance. We expect international sales to be $1,859.3 million, down 0.9% year over year. The dismal performance in China is likely to have adversely impacted the company’s international sales.
Inflationary pressures and increased investments in store partner wages and benefits are likely to have affected the margin in the quarter-to-be reported. We expect the adjusted operating margin in first-quarter fiscal 2023 to be 14.5% compared with 15.1% reported in the prior-year quarter. Moreover, we expect total operating expenses to be $4,747.9 million, up 8.3% from the prior-year quarter.
Starbucks Corporation Price and EPS Surprise
Starbucks Corporation price-eps-surprise | Starbucks Corporation Quote
What the Zacks Model Unveils
Our proven model predicts 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 +1.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks Poised to Beat Estimates
Here are some other stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these too have the right combination of elements to beat on earnings this season:
Yum! Brands, Inc. (YUM - Free Report) currently has an Earnings ESP of +2.14% and a Zacks Rank #2.
Shares of Yum! Brands have gained 2.4% in the past year. YUM has a trailing four-quarter earnings surprise of negative 3.7% on average.
Yum China Holdings, Inc. (YUMC - Free Report) currently has an Earnings ESP of +7.14% and a Zacks Rank #2.
Shares of Yum China have increased 29.2% in the past year. YUMC’s has a trailing four-quarter earnings surprise of 263.4%, on average.
Shake Shack Inc. (SHAK - Free Report) has an Earnings ESP of +8.08% and a Zacks Rank #3.
Shares of Shake Shack have declined 14.5% in the past year. SHAK’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 37.2%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.