Starbucks Earnings: Here’s Why Shares are Down Now

Starbucks Corp. (NASDAQ:SBUX) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.98%.

Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!

Starbucks Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 20% to $0.48 in the quarter versus EPS of $0.40 in the year-earlier quarter.

Revenue: Rose 11.27% to $3.56 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Starbucks Corp. reported adjusted EPS income of $0.48 per share. By that measure, the company missed the mean analyst estimate of $0.48. It missed the average revenue estimate of $3.59 billion.

Quoting Management: “Starbucks record operating performance in Q2 continues to demonstrate the underlying strength and resilience of our expanding global business, and the increasing relevance of the Starbucks brand to consumers all around the world,” said Howard Schultz, chairman, president and chief executive officer. “Innovation and an enhanced customer experience drove strong comp sales and revenue growth, while a laser focus on improving efficiency and controlling costs enabled us to deliver record margins and earnings. Starbucks has never been better positioned to achieve the aspirational goal we have set of becoming one of the world’s most respected, admired and enduring brands.”

Key Stats (on next page)…

Revenue decreased 6.41% from $3.8 billion in the previous quarter. EPS decreased 15.79% from $0.57 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.53 to a profit $0.54. For the current year, the average estimate is a profit of $2.16, which is the same with that ninety days ago.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)