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The stock price of Starbucks Corporation closed on NASDAQ. The stock has gained 24% over the past three months. The coffeehouse chain is scheduled to report its first quarter 2023 earnings results on Thursday, February 2, after the market closes. Here’s what to expect from the upcoming report:
results
Analysts project $8.7 billion in revenue for Starbucks in the first quarter of 2023. This compares to $8.1 billion reported in the first quarter of 2023. In the fourth quarter of 2022, consolidated revenue increased 3% year-over-year to $8.4 billion .
fortunate
Analysts forecast EPS to be $0.77 in Q1 2023 which compares to adjusted EPS of $0.72 in the year-ago quarter. In Q4 2022, adjusted EPS was $0.81, down 18% YoY.
Points to note
In Q4, global comparable sales rose 7%, driven by growth in average tickets. While comp sales in North America and the US rose 11% during the fourth quarter, International comps declined 5%, hurt mainly by the impact of the pandemic in China. It remains to be seen how much the Chinese market has recovered and the overall impact on the International segment.
In its Q4 report, Starbucks said it expects China comps in the first quarter to be negative followed by outsized comps in the balance of the year. Global comps are expected to be low in the first quarter and then expand through the coming quarters.
In the fourth quarter, Starbucks operating margin fell 400 basis points YoY to 14.2% due to investment and workforce growth as well as inflationary pressures. The company expects operating margins to remain soft in the first and second quarters of 2023 and then gain traction in the latter half of the year helped by margin benefits from the Reinvention plan and the expected recovery in China.
China is Starbucks’ second largest market and pandemic-related headwinds in the region hurt the company’s international segment results. The pace of recovery in China and the performance of the International segment along with comp sales and margin prospects are key points to watch.
Click here to read the full transcript of the Starbucks Q4 2022 earnings conference call
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