Starbucks Rises on Strong Earnings and Guidance

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Starbucks Corp. (NASDAQ: SBUX) reported fiscal fourth-quarter financial results after markets closed on Thursday. The company posted $0.56 in earnings per share (EPS) and $5.7 billion in revenue. The consensus estimates from Thomson Reuters called for $0.55 in EPS and $5.68 billion in revenue. The same period from last year had $0.43 in EPS and $4.91 billion in revenue.

The U.S. comparable store sales increase of 4% was comprised of a 6% increase in average ticket and a 1% decrease in traffic. After adjusting for the estimated impact of order consolidation related to the new Starbucks Rewards loyalty program, average ticket grew 4% and traffic grew 1%.

Mobile Order and Pay represented 6% of U.S. transactions in the quarter, up from 5% in the prior quarter.

The company opened 690 net new stores in the quarter, bringing total stores to 25,085 in 75 countries worldwide.

The board of directors declared a cash dividend of $0.25 per share, a 25% increase. It is payable on December 2, for shareholders of record on November 17.

In terms of guidance for the coming fiscal year, the company expects roughly 2,100 net new stores globally, consolidated revenue growth in the double digits, and EPS in the range of $2.12 to $2.14. The consensus estimates are calling for $2.16 in EPS and $23.1 billion in revenue.

Howard Schultz, Starbucks Chairman and CEO, commented:

Starbucks record Q4 and fiscal 2016 financial and operating results in the face of ongoing economic, consumer and geopolitical headwinds, and the significant investments we continue to make in our people and our business, once again demonstrate the power, relevance and resilience of the Starbucks business and brand. The trust and confidence our customers have in the Starbucks brand – and in our store partners – is propelling our business forward in markets and channels around the world as never before.

Shares of Starbucks closed Thursday down 2.3% at $51.77, with a consensus analyst price target of $65.73 and a 52-week trading range of $51.34 to $63.19. Following the release of the earnings report, the stock was up 2.7% at $53.15 in the after-hours trading session.

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