The 10-second takeaway
For the quarter ended March 31 (Q2), Starbucks met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew significantly.
Margins grew across the board.
Starbucks logged revenue of $3.56 billion. The 27 analysts polled by S&P Capital IQ wanted to see revenue of $3.58 billion on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $3.20 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 $0.48. The 29 earnings estimates compiled by S&P Capital IQ anticipated $0.48 per share. Non-GAAP EPS of $0.48 for Q2 were 20% higher than the prior-year quarter's $0.40 per share. GAAP EPS of $0.51 for Q2 were 28% higher than the prior-year quarter's $0.40 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 57.0%, 120 basis points better than the prior-year quarter. Operating margin was 13.8%, 190 basis points better than the prior-year quarter. Net margin was 11.0%, 130 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.72 billion. On the bottom line, the average EPS estimate is $0.54.
Next year's average estimate for revenue is $14.90 billion. The average EPS estimate is $2.17.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,699 members out of 8,329 rating the stock outperform, and 1,630 members rating it underperform. Among 2,310 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 2,125 give Starbucks a green thumbs-up, and 185 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 $63.15.
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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 recommends Starbucks. The Motley Fool owns shares of 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.
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