The 10-second takeaway
For the quarter ended June 30 (Q3), Starbucks met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. GAAP earnings per share increased significantly.
Margins expanded across the board.
Starbucks tallied revenue of $3.74 billion. The 26 analysts polled by S&P Capital IQ predicted sales of $3.72 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $3.30 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 $0.55. The 27 earnings estimates compiled by S&P Capital IQ predicted $0.53 per share. GAAP EPS of $0.55 for Q3 were 28% higher than the prior-year quarter's $0.43 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 57.3%, 110 basis points better than the prior-year quarter. Operating margin was 14.7%, 140 basis points better than the prior-year quarter. Net margin was 11.2%, 110 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.81 billion. On the bottom line, the average EPS estimate is $0.58.
Next year's average estimate for revenue is $14.90 billion. The average EPS estimate is $2.20.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,746 members out of 8,380 rating the stock outperform, and 1,634 members rating it underperform. Among 2,411 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 2,238 give Starbucks a green thumbs-up, and 173 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 $69.00.
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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.