[Note: Starbucks
SBUX
’ fiscal year ended in early October]
Starbucks stock (NASDAQ
NDAQ
: SBUX), the world’s leading roaster, marketer, and retailer of specialty coffee worldwide, is scheduled to report its Q4 2023 results on Tuesday, November 2. We expect SBUX stock to trade higher with revenues and earnings beating expectations slightly in its fourth-quarter results. The company’s Q3 operating margins expanded from 15.9% in 2022 to 17.4% in 2023, driven by sales leverage, pricing, and productivity improvement. This compares to operating margin growth of 14.5% in Q1 and 14.3% in Q2 2023. Starbucks’ long-term operating trends outlook is bright as it capitalizes on increasing customer satisfaction across its selling footprint. According to the Q3 results, China’s revenue grew 51% when compared to a soft comparable which included lockdowns. There are signs that China’s coffee consumption is on the rise, which will help drive the chain’s growth. Furthermore, Starbucks plans to invest significantly in the region to enhance its digital capabilities and accelerate the rewards program there. For the full-year 2023, the company expects revenue growth of 10% to 12%, and EPS growth of 16% to 17%.
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