Starbucks is set to report fiscal third-quarter results after market close on Wednesday, July 29, with analysts expecting just over $9.1 billion in revenue and $0.65 per share in net income. That revenue projection is nearly 4% below the year-ago quarter, largely due to the shift of its China business into a 60/40 joint venture with Boyu Capital, while the earnings estimate represents a 30% improvement. The company's second quarter saw net revenue rise nearly 9% to over $9.5 billion and adjusted earnings jump 22% to $0.50 per share, prompting management to raise full-year comparable sales growth guidance to at least 5% and adjusted EPS to a range of $2.25 to $2.45. North America same-cafe sales grew over 7% in the second quarter, but international growth was weaker, with China posting a 1.6% decline in average ticket. The stock trades at a forward P/E of nearly 35, and the author expresses caution, viewing Starbucks as a mature business with limited room for expansion despite recent operational improvements under the Back to Starbucks strategy.
Starbucks CorporationArticle reports upcoming Q3 earnings and past Q2 results, with mixed signals: revenue expected down 4% YoY but earnings up 30%, and management raised guidance.