The 10-second takeaway
For the quarter ended April 1 (Q2), Starbucks met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share grew significantly.
Gross margins shrank, operating margins contracted, and net margins grew.
Starbucks reported revenue of $3.20 billion. The 24 analysts polled by S&P Capital IQ expected revenue of $3.18 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $2.79 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.40. The 26 earnings estimates compiled by S&P Capital IQ anticipated $0.39 per share. GAAP EPS of $0.40 for Q2 were 18% higher than the prior-year quarter's $0.34 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 55.8%, 180 basis points worse than the prior-year quarter. Operating margin was 11.8%, 30 basis points worse than the prior-year quarter. Net margin was 9.7%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.31 billion. On the bottom line, the average EPS estimate is $0.46.
Next year's average estimate for revenue is $13.36 billion. The average EPS estimate is $1.86.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 6,024 members out of 7,669 rating the stock outperform, and 1,645 members rating it underperform. Among 2,191 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,986 give Starbucks a green thumbs-up, and 205 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Starbucks is outperform, with an average price target of $56.96.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of Starbucks. Motley Fool newsletter services have recommended writing covered calls on Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.