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ETFs in Focus on Starbucks' Solid Q4 Earnings Report

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Starbucks Corporation (SBUX - Free Report) released fourth-quarter fiscal 2019 results after market close on Oct 30, with earnings matching estimates and revenues surpassing the same. Following the earnings release, shares of Starbucks gained almost 3% in after-hour trading.

Earnings in Focus

Starbucks reported adjusted earnings of 70 cents per share, meeting the consensus mark but improving 12.9% from the year-ago quarter. Revenues grew nearly 7% year over year to $6.75 billion, beating the Zacks Consensus Estimate by 1.1%.

Strength in the Americas and China-Asia-Pacific segments and store openings drove the company’s performance in the reported quarter. The company’s efforts to deliver enhanced customer experience, launch beverages and broaden digital customer relationships have been driving results. In fact, Starbucks saw strong demand for new beverages in the United States and China. Notably, comparable sales from China increased for the fifth straight quarter (read: ETFs in Focus as US Consumer Confidence Drops in October).

Starbucks expects GAAP EPS in the range of $2.84-$2.89. Also, non-GAAP EPS is estimated within $3.00-$3.05. Moreover, consolidated GAAP revenue growth is projected within 6-8%.

Business Update

Starbucks opened 630 net stores worldwide, taking the total tally to 31,256. Global store growth was 7% on a year-over-year basis.

Moreover, global comparable store sales increased 5%. Global comps were driven by a 3% rise in average ticket and 2% improvement in comparable transactions.

The company’s Active Starbucks Rewards loyalty program expanded to 17.6 million active members in the United States, up 15% on a year-over-year basis.

ETFs in Focus

Investors might want to take a look at some consumer discretionary ETFs which have notable exposure to Starbucks and can cash in on the coffee giant’s stellar earnings results (see: all the Consumer Discretionary ETFs here):

Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) — 4.39% exposure

The fund tracks the Dynamic Leisure and Entertainment Intellidex Index, which comprises stocks of U.S. leisure and entertainment companies. The index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors. The fund comprises 30 holdings with Starbucks occupying the seventh position. Its AUM is $52.7 million and expense ratio is 0.63%. The fund carries a Zacks ETF Rank #3 (Hold) with a High risk outlook.

Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) — 4.46% exposure

The fund tracks the Dynamic Food & Beverage Intellidex Index comprising stocks of 30 U.S. food and beverage companies. These are companies that are principally engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies. The fund comprises 30 holdings with Starbucks occupying the seventh spot. Its AUM is $70.9 million and expense ratio is 0.63%. The fund carries a Zacks ETF Rank #3 with a Medium risk outlook (read: ETFs & Stocks to Defy Weak September Retail Sales).

iShares Evolved U.S. Consumer Staples ETF  — 4.03% exposure

It is an actively managed fund which employs data science techniques to identify companies with exposure to the consumer staples sector. The fund comprises 123 holdings with Starbucks occupying the eighth spot. Its AUM is $8.3 million and expense ratio is 0.18%.

Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) — 4.31% exposure

The fund tracks the Consumer Discretionary Select Sector Index and comprises 64 holdings. Starbucks sits at the fifth spot. The fund’s AUM is $14.42 billion and expense ratio is 0.13%. It carries a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Antitrust Probe Likely to Hit These Tech ETFs).

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