Starbucks Gears Up For Q1 Earnings: What's In Store?

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Starbucks Corporation (SBUX - Free Report) is scheduled to report first-quarter fiscal 2022 results on Feb 1, after the closing bell. In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate.

Q1 Estimates

The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at 80 cents per share, indicating growth of 31.2% year over year. In the past seven days, earnings estimates for the current quarter have been revised upward by a penny. The consensus mark for revenues stands at $7.99 billion, suggesting growth of 18.4% from the year-ago quarter.

Factors to Note

The company’s fiscal first-quarter performance is likely to have benefited from robust comps growth and digitalization. The company’s robust store expansion efforts are likely to have contributed to the top line. Starbucks expects to open nearly 2,000 net new stores worldwide in fiscal 2022.

Increase in transaction and average ticket growth might have driven the company’s comps. In the fourth quarter of fiscal 2021, the company’s North America segment reported comps growth of 22% year over year, owing to an 18% increase in transaction comps and a 3% rise in average ticket. U.S. comps rose 20% in the fiscal fourth quarter, courtesy of a material increase in transaction comps of 19%. The company now anticipates global comparable sales to reach high-single digits in fiscal 2022.

China and the Asia-Pacific regions have been gaining from unit growth, rising brand awareness, and increased usage of the digital/mobile/loyalty platforms. In the past year, mobile order sales have doubled in China. The company has been gaining from its partnership with Beyond Meat to roll out a plant-based lunch menu in China.

The Zacks Consensus Estimate for revenues for North America and International segments is pegged at $5,634 million and $1,891 million, suggesting a year-over-year improvement of 19.8% and 14.3%, respectively.

However, resurgence in coronavirus cases in some parts of the world might have weighed on the to-be-reported quarter’s performance. The pandemic is likely to have impacted the company’s traffic in the quarter. During the fourth quarter of fiscal 2021, operations in Starbucks China were affected by pandemic-induced restrictions across 18 provincial-level regions. With a majority of the stores closed (or operating at different levels of elevated public health protocols), the company reported constrained customer mobility with operations pertaining to mobile ordering and limited seating.

Starbucks Corporation Price and EPS Surprise

Starbucks Corporation Price and EPS Surprise

Starbucks Corporation price-eps-surprise | Starbucks Corporation Quote

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