Factors Setting The Tone For Starbucks (SBUX) Q1 Earnings
Zacks Investment Research | Jan 22, 2020 09:13PM ET
Starbucks Corporation (NASDAQ:SBUX) is scheduled to report first-quarter fiscal 2020 results on Jan 28, after the closing bell. In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate.
Q1 Expectations
The Zacks Consensus Estimate for first-quarter earnings is pegged at 75 cents, flat with the prior-year period. Over the past 30 days, the company’s earnings estimates have been stable. For quarterly revenues, the consensus mark is pegged at $7,089 million, suggesting growth of 6.8% from the prior-year quarter.
Factors at Play
Robust performance of Americas and Channel Development segments is likely to get reflected in Starbucks’ first-quarter top line. The company’s fiscal first-quarter performance is also likely to have benefited from new store additions, expansion in China and positive global comparable store sales.
The Zacks Consensus Estimate for revenues for Americas segment and Channel Development segment is anticipated to witness year-over-year improvement of 4% and 8.3% to $525 million and $4,989 million, respectively.
Moreover, China and the Asia-Pacific region have been gaining from unit growth, rising brand awareness and increased usage of the digital/mobile/loyalty platforms. Moreover, the company’s partnership with Alibaba (NYSE:BABA) is also likely to show on the company’s fiscal first-quarter performance.
However, margin contraction is likely to have impacted the to-be-reported quarter’s performance. Rise in costs thanks to investment in digitalization is likely to have weighed on the company’s operating margin.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Zacks Investment Research
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