Starbucks (SBUX) stock is trading higher Wednesday after the world's largest coffee chain reported mixed earnings results for its fiscal third quarter and reiterated its full-year outlook.
In the quarter ended June 30, Starbucks said its revenue decreased 0.6% year–over-year to $9.1 billion, pressured by a 3% decline in global comparable-store sales. Its earnings per share (EPS) were down 6.1% from the year-ago period to 93 cents.
"Our efficiency efforts, which are tracking ahead of expectations, partially offset investments associated with the cautious consumer environment," Starbucks Chief Financial Officer Rachel Ruggeri said in a statement. "Collectively, our disciplined approach enables us to preserve both balance sheet strength and flexibility, positioning us to successfully navigate through the current macroeconomic environment."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Starbucks' top-line results fell short of the $9.2 billion in revenue Wall Street was expecting, while earnings came in higher than the 93 cents per share analysts' forecast, according to CNBC.
On its conference call, Starbucks reiterated the full-year outlook it provided in the second quarter, which calls for revenue to grow in the low single-digit percentage and earnings-per-share growth in a range of flat to low single-digit percentage.
While William Blair analyst Sharon Zackfia believes fiscal 2024 guidance is meetable, the company's third-quarter results "did little to increase visibility on how quickly revenue and profit growth will reignite." The analyst adds that it's likely that fiscal year 2025 financials will "fall below the company's algorithmic growth target of 5%-plus comparisons yielding 15%-plus EPS growth, in our opinion."
Is Starbucks stock a buy, sell or hold?
Starbucks has struggled on the price charts this year, down more than 18%. And Wall Street is on the sidelines when it comes to consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for SBUX stock is $87.18, representing an upside of more than 10% to current levels. Despite the upside potential, the consensus recommendation is a Buy, but with very low conviction.
William Blair's Zackfia has a Market Perform (equivalent of a Hold) rating on the large-cap stock. The analyst reiterated her rating after earnings, calling "conviction in our out-year estimate shaky."
Related Content
-
Colorado Sending Billions in TABOR RefundsState Tax Are you receiving a TABOR refund with your 2025 Colorado state income tax filing? Don’t miss the deadline.
-
How a Financial Adviser Can Help You Sleep at NightWhen it comes to your money and planning for your retirement, legacy and more, you might need a professional to help you stay on top of it all.
-
How a Financial Adviser Can Help You Sleep at Night
When it comes to your money and planning for your retirement, legacy and more, you might need a professional to help you stay on top of it all.
-
Debunking the Myth of the Silver SpoonJust because your family is wealthy doesn't mean life's all smooth sailing for your kids. When family dynamics are complicated, communication is key.
-
Stock Market Today: Nasdaq Hits New High Ahead of Alphabet EarningsThe Google parent is one of several mega caps reporting earnings this week, with results due out after Tuesday's close.
-
Why Pfizer Stock Is Lower After a Beat-and-Raise QuarterPfizer stock is down Tuesday even after the drugmaker reported higher-than-expected Q3 earnings and raised its full-year outlook.
-
McDonald's Stock Stabilizes After Earnings. Is It Time to Buy?McDonald's stock is moving cautiously higher Tuesday after the fast-food chain beat Q3 expectations, but E. coli concerns remain.
-
Is PayPal Stock Still a Buy After a Revenue Miss?PayPal stock is falling Tuesday after the payments giant reported mixed third-quarter results, but most of Wall Street remains bullish.
-
The Tax Rules to Consider Before Buying an AnnuityAnnuities can play a valuable role in your retirement plan — as long as the tax implications have been properly factored in. Here's an outline of the key rules.
-
Beware of 'Buy a Business' Coaching ScamsJust because someone says they can make you rich by helping you buy the business of your dreams doesn’t mean they actually have the expertise to do that.
