Will ETFs Gain On Starbucks' Q2 Earnings Beat Amid Pandemic?

Starbucks Coffee building during daytime

Starbucks Corporation SBUX released second-quarter fiscal 2021 results, after market close, on April 27. The company’s earnings topped estimates while revenues lagged the same. However, the metrics rose year over year amid the pandemic. Notably, shares of Starbucks have declined 1.3% since the earnings release, largely due to revenues missing analyst’s estimates.

Earnings in Detail

Starbucks reported adjusted earnings of 62 cents per share, surpassing the consensus mark of 52 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 32 cents. Notably, the bottom line surpassed the Zacks Consensus Estimate for the sixth straight quarter. Revenues rose nearly 11.2% year over year to nearly $6.67 billion but lagged the Zacks Consensus Estimate of $6.80 billion. The upside was primarily driven by growth in comparable store sales, partially offset by the unfavorable impact of Global Coffee Alliance transition-related activities.

Business Update

Starbucks opened five net new stores worldwide in the fiscal second quarter, taking the total tally to 32,943. Global store growth was 3% on a year-over-year basis.

Meanwhile, global comparable store sales rose 15% year over year. Global comps were up on a 19% increase in average ticket, marginally offset by a 4% decline in comparable transactions.

The company’s Active Starbucks Rewards loyalty program expanded to 22.9 million active members in the United States, up 18% on a year-over-year basis.

Guidance

Starbucks has updated its fiscal 2021 GAAP earnings guidance. Management noted that fiscal year 2021 is a 53-week year instead of the normal 52 weeks. The company continues to expect global comparable sales growth between 18% and 23% in fiscal 2021.

Moreover, fiscal year 2021 earnings are expected in the range of $2.90-$3.00 compared with the previous estimate of $2.70-$2.90. The company projects consolidated revenues in the range of $28.5-$29.3 billion, inclusive of a $500-million impact attributable to the 53rd week.

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