S&P 500
7,507.80
-0.22%
Dow Jones
51,595.40
-0.32%
Nasdaq 100
30,411.80
-0.23%
Russell 2000
2,975.48
-0.09%
FTSE 100
10,384.00
-0.35%
Nikkei 225
71,987.20
+0.02%

Retail

Starbucks, The Turnaround Has Fully Turned Around (SBUX)

Photo of Jon C. Ogg
By Jon C. Ogg Updated Published
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Invalid Image
Starbucks Corp. (NASDAQ: SBUX) may have won over some new investors with its dividend announcement last month, but so far it looks to be winning over people with earnings despite a 150% gain from trough to peak in the last bull market cycle.  The company beat earnings and raised guidance, and shares are so far responding.

Its non-GAAP operating margins came in at 17.8%, a considerable improvement from 10.4% a year ago.  The turnaround is working.  Lower store costs, better sales leverage, higher productivity (more work from fewer hands) and closing underperforming stores all contributed.

Starbucks reported $0.29 EPS vs. $0.25 EPS expected; revenues rose over 8% to $2.53 billion vs. $2.41 billion expected. For 2010, it now sees earnings of $1.19 to 1.22 EPS, up from its previous $1.05 to $1.08 range and above the Thomson Reuters $1.12 EPS consensus estimate.

Starbucks closed up 0.5% at $25.39 today, and the 52-week range is $11.20 to $26.00.  We have shares up 1% at $25.66 in the after-hours session.  Valuation may still be a concern going forward, but either way it impossible not to expect analysts to raise their earnings expectations for 2010 and 2011 tomorrow.

JON C. OGG

DISCLOSURE:
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org). Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options  Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation.
Follow 24/7 Wall St. on Google
Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

Featured Reads

Our top personal finance-related articles today. Your wallet will thank you later.

The Average American Has $246,500 at 60. Here's Why It Covers Just 3 Years of Retirement
David Beren |

The Average American Has $246,500 at 60. Here's Why It Covers Just 3 Years of Retirement
Original Medicare Covers 80% of Your Doctor Bills. The Other 20% Has No Ceiling
Drew Wood |

Original Medicare Covers 80% of Your Doctor Bills. The Other 20% Has No Ceiling

Continue Reading

Jon C. Ogg |

Starbucks’ Caffeinated Earnings Brings Multi-Year Highs (SBUX)

Starbucks Corp. (NASDAQ: SBUX) is managing to do what many probably thought was not possible.  It isn’t a shock that…

Chris Lange |

What to Expect From Starbucks Earnings

Starbucks is scheduled to report its fiscal fourth-quarter financial results after the markets close on Tuesday.

Chris Lange |

Starbucks Earnings Solid Enough for More All-Time Highs

Starbucks released inline fiscal second-quarter earnings after the markets closed Thursday.

Chris Lange |

Why This Analyst Sees Starbucks Stock Worth 20% More

Independent research firm Argus has detailed in a comprehensive report that Starbucks has a solid position going forward.

Jon C. Ogg |

Earnings Growth & Dividend Hike Meet Valuation at Starbucks (SBUX)

The turnaround continues at Starbucks Corp. (NASDAQ: SBUX).  The coffee chain posted a 37% profit gain and it raised its…

Douglas A. McIntyre |

Will Starbucks Start Paying Dividends? (SBUX)

2010 is becoming the year of the dividend… either raised dividends or it is new dividends.  Over the weekend, we…

Starbucks Slips Despite Solid Q1 Results
Chris Lange |

Starbucks Slips Despite Solid Q1 Results

Starbucks Corp. (NASDAQ: SBUX) released its fiscal first-quarter financial results after the markets closed on Thursday. The company said that…

Jon C. Ogg |

Why Starbucks Can Grow Its Dividend for a Decade

Here is more detail on why Starbucks has a dividend that is not just safe, but why it can grow…

Jon C. Ogg |

Starbucks Valuation Catching Up To Share Price After Earnings (SBUX, GMCR)

Starbucks Corporation (NASDAQ: SBUX) is out with earnings.  Some of the highlights are a record 11% earnings per share gain…

Top Gaining Stocks

CarMax
KMX • Vol: 7,330,419
Corning
GLW • Vol: 22,800,969
Intel
INTC • Vol: 233,719,006
Super Micro Computer
SMCI • Vol: 68,465,534
Enphase Energy
ENPH • Vol: 13,978,376

Top Losing Stocks

Accenture
ACN • Vol: 41,744,333
EPAM Systems
EPAM • Vol: 5,636,587
Cognizant
CTSH • Vol: 61,311,400
Coterra Energy
CTRA • Vol: 73,319,495
Kroger
KR • Vol: 26,704,230