Starbucks Elevators Profit Outlook, On Profits In The US, China; Starbucks Stock Rallies

Starbucks (SBUX) increased its full-year result and margin outlook on Thursday, which, together with better-than-expected sales trends in the US and China, sent stocks higher after the end.


The coffee chain increased its full-year earnings per share to $ 2.75 to $ 2.79. It's up from $ 2.68 to $ 2.73 and above expectations $ 2.73. The coffee chain also said that expected operating margins in the Americas region should be "slightly up," better than previous "down a bit."

"We are particularly pleased with our comparable store growth in our two leading markets, the US and China, where we are also continuing a strong new-store development with industry-leading returns," said CEO Kevin Johnson in a statement.

In the US and America The same store sales increased 4% better than the Consensus Metrix forecasts for a 3.7% gain, in China and the Asia-Pacific region they rose 2%, which was also better than the expectations of a 1.5% increase

Overall, same store sales 3% globally, just shy of 3.1% impressions.

Starbucks revenue, Starbucks Stock

Coffee chain reported earnings per share of 60 cents, an increase of 13%, revenue increased by 5% to 6 $ 3 billion.

Starbucks stuck to its overall sales outlook for the same year with a 3% -4% gain. The company still sees revenue growth of 5% to 7%.

Starbucks stock rose 1.7% to 79.04 after hours on the stock market today Rival Dunkin & # 39; Brands (DNKN) was unchanged.

Marketsmith analysis shows that the Starbucks share has a 93 composite character out of the best possible 99. The EPS rating is 86. The relative strength of the stock line has leveled out in recent days.

Thursday's gains add to Starbucks long run higher, even as some analysts say the stock price is already reflecting the benefits of the company's tighter operations. The company faces competition from other drinks and fast food players, who see coffee as an avenue for growth.

Drinking giant Coca-Cola (KO), who said this week, is planning to launch ready-to-drink coffee products in 25 markets this year, was also unchanged late on Thursday.

This month, Starbucks tweaked its loyalty program, which it uses to drive more traffic, to reward customers faster and expand their buying opportunities. The program had 16 million active members in December.

In January, Starbucks said it added delivery to San Francisco via a partnership with Uber Eats. The chain said it would expand this service to New York, Los Angeles, Chicago, Boston and Washington, D.C.

While the company's stores are difficult to avoid in the US, Starbucks has tried to plant more stores in China. But China's economy has slowed down, and the coffee chain is facing competition there.

Luckin Coffee IPO

Such a competitor in China, the fast-growing Luckin Coffee, filed to become public on Nasdaq this week. The company had nearly 2,400 stores in China at the end of last month, most of them smaller stores designed for pickup in areas such as colleges and office buildings. Luckin handles customers' coffee orders completely through the mobile apps. This approach, the company says in the filing, gives customers a "100% cashier-less environment."

Last year, Starbucks said it would work with Chinese e-commerce giant Alibaba (BABA) in an effort to strengthen its supply and retail network there. Under this partnership, Starbucks will try, a delivery platform operating under the Alibaba umbrella.

Starbucks will also set up the "delivery kitchen" in Alibaba's high-tech app-connected Hema supermarkets in an effort to expand Starbucks & # 39; s delivery network and exploit the supermarket's "highly efficient consumer insights."

Mizuho analyst Jeremy Scott, in a survey published before Starbucks & # 39; Earnings, said that competition, especially from a deep-seated competitor, could lead to more discounting in delivery in an attempt to attract consumers and hurt the top and bottom line of the process.


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