Starbucks Corporation (Nasdaq: SBUX) released its second-quarter fiscal year 2022 financial results after the market closed on Tuesday.
Financial Highlights
- Global comparable store sales increased 7%, driven by a 4% increase in average ticket and a 3% increase in comparable transactionsNorth America and U.S. comparable store sales increased 12%, driven by a 7% increase in average ticket and a 5% increase in comparable transactions
- International comparable store sales decreased 8%, driven by a 5% decline in average ticket and a 3% decline in comparable transactions; China comparable store sales decreased 23%, driven by a 20% decline in comparable transactions and a 4% decline in average ticket
- International and China comparable store sales include the unfavorable impact of approximately 3% and 4%, respectively, from lapping prior-year value-added tax (“VAT”) exemptions in China
- The company opened 313 net new stores in Q2, ending the period with 34,630 stores globally: 51% company-operated and 49% licensedAt the end of Q2, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 15,544 stores in the U.S and 5,654 stores in China
- Consolidated net revenues up 15% to a Q2 record $7.6 billion
- GAAP operating margin of 12.4% decreased 240 basis points from 14.8% in the prior year, primarily driven by inflationary pressures, mobility restrictions and lockdowns in China and investments in retail store partner wages and benefits, partially offset by pricing in North America and lapping restructuring costs in the prior yearNon-GAAP operating margin of 13.0% decreased from 16.0% in the prior year
- GAAP earnings per share of $0.58 grew 4% over the prior yearNon-GAAP earnings per share of $0.59, down from $0.61 in the prior year
- Starbucks® Rewards loyalty program 90-day active members in the U.S. increased to 26.7 million, up 17% year-over-year
CEO’s Statement
“We are single-mindedly focused on enhancing our core U.S. business through our partner, customer and store experiences. Given record demand and changes in customer behavior we are accelerating our store growth plans, primarily adding high-returning drive-thrus, and accelerating renovation programs so we can better meet demand and serve our customers where they are. The investments we are making in our people and the company will add the capacity we need in our U.S. stores today and position us ahead of the coming growth curve ahead.”
Analysts Estimate
- Revenue: $7.6 billion reported vs. $7.61 billion expected
- EPS: $0.59 reported vs. $0.60 expected
Earnings History
Starbucks’ second-quarter earnings highlights include:
- Global comparable store sales increased 13%, driven by a 10% increase in comparable transactions and a 3% increase in average ticket.
- North America and U.S. comparable store sales increased 18%, primarily driven by a 12% increase in comparable transactions and a 6% increase in average ticket.
- International comparable store sales decreased 3%, driven by a 5% decline in average ticket,
Starbucks’ most fourth-quarter earnings report was released on October 28, 2021. The coffee company reported $1.00 earnings per share for the quarter, which was in line with the consensus estimate of $1.00. The company’s revenue for the quarter was $8.10 billion, compared to analyst estimates of $8.22 billion.
Net sales increased 31% to $8.1 billion, falling short of analysts’ expectations of $8.21 billion. Global same-store sales increased by 17 percent, falling short of StreetAccount’s estimate of 18.3%.
Compared to the same quarter last year, its quarterly revenue increased by 30.6%. Starbucks earned $3.55 per share in the previous year ($3.55 diluted earnings per share) and has a price-to-earnings ratio of 27.4.
Earnings Forecast
Analysts estimate third-quarter earnings to be $0.96 per share, revenue to be $8.42 billion.
Company Profile
Starbucks Corporation, along with its subsidiaries, is a global roaster, marketer, and retailer of specialty coffee. The business is divided into North America, International, and Channel Development. Its stores sell coffee and tea beverages, roasted whole beans and ground coffees, single-serve products, and ready-to-drink beverages, as well as pastries, breakfast sandwiches, and lunch items.
In addition, the company licenses its trademarks to licensed stores and grocery and foodservice accounts. Starbucks, Teavana, Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi are the brands the company sells its products. It operated 16,826 company-operated and licensed stores in North America as of October 3, 2021, and 17,007 company-operated and licensed stores internationally as of October 3, 2021. The company was founded in 1971 and is headquartered in Seattle, Washington.
