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Management said mobile order and pay was one contributor to higher operating income. Source: Starbucks.

You've gotta love earnings headlines. Here are a few for Starbucks Corporation (NASDAQ:SBUX) after the company's first quarter earnings release on January 21:

  • "Starbucks Earnings OK, But Sales, Outlook Not Grande"
  • "Starbucks Gives Soft Profit Outlook"
  • "Starbucks Profit Forecast Misses Estimates; Shares Fall"

The global coffee purveyor just turned in another record quarter with strong sales and comps growth in every region, and the headline is the company missed its profit forecast estimate? Not that it actually missed a forecast for sales, but the company's guidance for next quarter came in lower than analysts were predicting.

The market is reacting in after-hours trading -- Starbucks shares are down about 4% as of this writing -- to a shortfall in earnings guidance for next quarter. Not a large miss, either. The company is forecasting earnings per share between $0.38-$0.39, while analysts were expecting $0.40 per share. Shouldn't the headline read, "Starbucks Analysts Overshoot Their Estimates" -- or something like that? 

Either way, the point is, don't invest based on headlines. They often tell only a very small part of the story, and usually not even the most-important part. Let's take a closer look at Starbucks' results for Q1, as well as the outlook going forward. 

The numbers 
Starbucks reported a record $5.4 billion in revenue, up 12% from the year-ago quarter. Comparable sales at stores open at least 13 months increased 8% globally, with a 4% increase in traffic. Americas -- its largest segment -- reported 8% comps growth, and China/Asia Pacific -- the key growth region -- reported 5% comps growth, with 4% of that driven by increased traffic. The results at both segments are in line with what they have produced in recent quarters. 

Operating income increased 16%, to $1.1 billion, while GAAP earnings per share actually declined from $983 million last year to $688 million this quarter. This is where it's important to understand how non-GAAP reconciliation can help give context for earnings results. In last year's first quarter, Starbucks recognized a $391 million one-time gain from the acquisition of a joint venture, and this added to the net income result as required under generally accepted accounting practices.

Adjusting for this one-time gain, Starbucks' net income in the first quarter increased by 16% from last year. 

Keys to the quarter 

  • Starbucks opened 528 net new stores in the quarter, with 281 of those in China/Asia Pacific, the most the company has opened in that market in a single quarter. 
  • The company served 23 million more customer occasions in the quarter than it did in the year-ago quarter. Eighteen million of those were in the U.S., further signaling there is growth potential for the brand at home. 
  • Membership in Starbucks' rewards program increased 23%. 
  • A record $1.9 billion was loaded on Starbucks prepaid cards in the quarter.
  • The channel development segment -- responsible for products sold at other retailers -- grew sales 16%, to more than $500 million, and increased operating income by 23% on strong margin expansion. This is the company's second-fastest-growing business behind China/Asia Pacific. 

Looking ahead 
Starbucks shares are trading down in after hours following the earnings release, and maybe it's partly due to second quarter 2016 guidance that came in below what analysts wanted to see. The company is forecasting for adjusted EPS of $0.38-$0.39 in the second quarter, while Wall Street was expecting $0.40 on a consensus basis. But even at the low-end of the company's guidance, that's a 15% increase from last year's Q2 earnings per share. 

The company also reiterated its guidance for 10%-plus revenue growth for the full year, as well as its full-year earnings guidance, capital expenditures, and the planned 1,800 net new stores it will open. 

Bottom line? Starbucks continues to execute as well as any company out there, and is delivering world-class results. I don't know what will happen when the market opens for trading on January 22 or in the days and weeks to come, but the long term continues to look great for Starbucks investors, even if the company missed Mister Market's expectations for next quarter's earnings forecast -- whatever that means.

Jason Hall owns shares of Starbucks. The Motley Fool owns shares of and recommends 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.