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Starbucks (SBUX) Set to Post Q3 Earnings: What's in Store?
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Starbucks Corporation (SBUX - Free Report) is scheduled to report third-quarter fiscal 2023 results on Aug 1, after the closing bell. In the last reported quarter, the company delivered an earnings beat of 15.6%.
Q3 Estimates
The Zacks Consensus Estimate for earnings is pegged at 95 cents per share, indicating growth of 13.1% year over year. In the past 30 days, earnings estimates have witnessed downward revisions by 1%. The Zacks Consensus Estimate for revenues is pegged at $9.3 billion, suggesting an increase of 14% from the year-ago quarter.
Factors to Note
SBUX’s focus on improving customer experience with innovative new store designs and upgraded product offerings, and supply-chain efficiencies has been contributing to its top line. Focus on store growth and robust loyalty program adds to its growth. During fiscal 2023, it expects store count in the United States and China to grow approximately 3% and 13%, respectively.
Robust comparable sales growth is likely to have aided the company’s top line in the quarter. Our model predicts North America and International sales growth to increase 9% and 9.1% year over year, respectively.
In third-quarter fiscal 2023, our model estimates North America and Channel Development sales to be $6,934.2 million and $541.4 million, up 14.5% and 12.9% year over year, respectively. Starbucks is gaining from a rise in transactions and average ticket growth. We expect international sales to improve 12.1% year over year to $1,776.8 million.
The ongoing inflationary pressure is likely to have hurt SBUX’s margin. Its ingredients are witnessing a significant uptick in price since the last few quarters. Our model suggests adjusted operating margin to be 16.8%, flat year over year. Our model anticipates total operating expenses to be $4,969.4 million, up 15.7% from the prior-year quarter.
Our proven model doesn’t conclusively predict 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 (the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) of -0.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Starbucks currently carries a Zacks Rank #3.
Stocks Poised to Beat Estimates
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season.
Arhaus (ARHS - Free Report) currently has an Earnings ESP of +7.69% and sports a Zacks Rank #1. ARHS is expected to register a bottom-line decline when it reports second-quarter 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 26 cents suggests a fall of 7.1% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arhaus’ top line is anticipated to rise year over year. The consensus mark is pegged at $325.7 million, indicating an increase of 6.3% from the year-ago quarter’s reported figure. ARHS has a trailing four-quarter earnings surprise of 82.4%, on average.
Ross Stores (ROST - Free Report) currently has an Earnings ESP of +11.50% and carries a Zacks Rank #2. ROST is likely to register a bottom-line improvement while reporting second-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.14 implies a rise of 2.7% from the year-ago quarter.
Ross Stores’ top line is expected to jump year over year. The Zacks Consensus Estimate is pegged at $4.72 billion, which suggests a gain of 3% from the prior-year quarter’s levels. ROST has a trailing four-quarter earnings surprise of 11.5%, on average.
Costco (COST - Free Report) currently has an Earnings ESP of +0.73% and a Zacks Rank of 3. COST is likely to register bottom-line growth while posting fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.73 indicates a 10.5% increase from the year-ago reported number.
Costco’s top line is projected to ascend year over year. The Zacks Consensus Estimate is pegged at $78.85 billion, indicating 9.4% rise from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 1.8%, on average.
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Starbucks (SBUX) Set to Post Q3 Earnings: What's in Store?
Starbucks Corporation (SBUX - Free Report) is scheduled to report third-quarter fiscal 2023 results on Aug 1, after the closing bell. In the last reported quarter, the company delivered an earnings beat of 15.6%.
Q3 Estimates
The Zacks Consensus Estimate for earnings is pegged at 95 cents per share, indicating growth of 13.1% year over year. In the past 30 days, earnings estimates have witnessed downward revisions by 1%. The Zacks Consensus Estimate for revenues is pegged at $9.3 billion, suggesting an increase of 14% from the year-ago quarter.
Factors to Note
SBUX’s focus on improving customer experience with innovative new store designs and upgraded product offerings, and supply-chain efficiencies has been contributing to its top line. Focus on store growth and robust loyalty program adds to its growth. During fiscal 2023, it expects store count in the United States and China to grow approximately 3% and 13%, respectively.
Robust comparable sales growth is likely to have aided the company’s top line in the quarter. Our model predicts North America and International sales growth to increase 9% and 9.1% year over year, respectively.
In third-quarter fiscal 2023, our model estimates North America and Channel Development sales to be $6,934.2 million and $541.4 million, up 14.5% and 12.9% year over year, respectively. Starbucks is gaining from a rise in transactions and average ticket growth. We expect international sales to improve 12.1% year over year to $1,776.8 million.
The ongoing inflationary pressure is likely to have hurt SBUX’s margin. Its ingredients are witnessing a significant uptick in price since the last few quarters. Our model suggests adjusted operating margin to be 16.8%, flat year over year. Our model anticipates total operating expenses to be $4,969.4 million, up 15.7% 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 doesn’t conclusively predict 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 (the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) of -0.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Starbucks currently carries a Zacks Rank #3.
Stocks Poised to Beat Estimates
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season.
Arhaus (ARHS - Free Report) currently has an Earnings ESP of +7.69% and sports a Zacks Rank #1. ARHS is expected to register a bottom-line decline when it reports second-quarter 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 26 cents suggests a fall of 7.1% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arhaus’ top line is anticipated to rise year over year. The consensus mark is pegged at $325.7 million, indicating an increase of 6.3% from the year-ago quarter’s reported figure. ARHS has a trailing four-quarter earnings surprise of 82.4%, on average.
Ross Stores (ROST - Free Report) currently has an Earnings ESP of +11.50% and carries a Zacks Rank #2. ROST is likely to register a bottom-line improvement while reporting second-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.14 implies a rise of 2.7% from the year-ago quarter.
Ross Stores’ top line is expected to jump year over year. The Zacks Consensus Estimate is pegged at $4.72 billion, which suggests a gain of 3% from the prior-year quarter’s levels. ROST has a trailing four-quarter earnings surprise of 11.5%, on average.
Costco (COST - Free Report) currently has an Earnings ESP of +0.73% and a Zacks Rank of 3. COST is likely to register bottom-line growth while posting fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.73 indicates a 10.5% increase from the year-ago reported number.
Costco’s top line is projected to ascend year over year. The Zacks Consensus Estimate is pegged at $78.85 billion, indicating 9.4% rise from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 1.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.