Starbucks Corporation (SBUX) on Q1 2021 Results - Earnings Call Transcript

Operator: Good afternoon. My name is Hector, and I will be your conference operator today. I would like to welcome everyone to today’s Starbucks Coffee Company Conference Call. All lines have been placed on mute to prevent any background noise. After a brief introduction, we'll go directly to question-and-answer session. Durga Doraisamy: Good afternoon everyone and thank you for joining us today to discuss our first quarter fiscal year 2021 results. Today's discussion will be led by Kevin Johnson, President and CEO; and Pat Grismer, CFO. And for Q&A, we will be joined by Roz Brewer, Chief Operating Officer and Group President, Americas; John Culver, Group President, International, Channel Development and Global Coffee, Tea & Cocoa. Also present is Rachel Ruggeri, Senior Vice President, Finance for the Americas. This conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC; including our last annual report on Form 10-K and quarterly report on Form 10-Q. Starbucks assumes no obligation to update any of these forward-looking statements or information. GAAP results in fiscal 2021 include several items related to strategic actions including restructuring and impairment charges, transaction and integration costs, and other items. These items are excluded from our non-GAAP results. For certain non-GAAP financial measures mentioned in today's call, please refer to our website at investor.starbucks.com to find their corresponding GAAP measures as well as a reconciliation of these non-GAAP financial measures with their corresponding GAAP measures. This conference call is being webcast and an archive of the webcast will be available on our website through Friday, February 26, 2021. Finally, for your calendar planning purposes, please note that our second quarter fiscal year 2021 earnings call has been tentatively scheduled for Tuesday, April 27th. I will now turn the call over to Kevin. Kevin Johnson: Well, good afternoon, and thank you for joining us today. As I reflect on this past year, clearly, we have all been through a lot, a lot of trying times and a lot of change. And at a time when society and all of humanity are a bit fragile, I am optimistic because this year holds tremendous promise for healing. I believe Starbucks can play an important role in that healing process, bringing people together to feel connected, supporting our communities in a positive and responsible way, and advancing a more equitable and inclusive world. Pat Grismer: Thank you, Kevin and good afternoon everyone. As Kevin shared, we are very pleased with our start to fiscal 2021 with meaningful sequential improvements in quarterly financial results despite ongoing business disruption from the pandemic, again demonstrating the new level of resilience that we have introduced into the business during these unprecedented times. Starbucks reported global revenue of $6.7 billion in Q1, down 5% from the prior year. Q1 EPS was higher than the guidance range we provided on our last earnings call, primarily driven by better than expected margin recovery. Q1 GAAP EPS of $0.53, declined from $0.74 in the prior year, but outperformed our guidance range as it also benefited from lower than expected restructuring and impairment costs as I will discuss in greater detail later. Q1 non-GAAP EPS was $0.61, down from $0.79 in the prior year, primarily due to the lingering impact of the pandemic. I will first take you through our Q1 fiscal 2021 operating performance by segment, followed by an analysis of our consolidated margin performance. I will then share some perspective on our outlook for Q2 and the full fiscal year. Our Americas segment delivered revenue of $4.7 billion in Q1, 6% lower than the prior year, primarily due to a 6% decline in comparable store sales as well as lower product sales to and royalty revenues from our licensees as a result of the pandemic. As Kevin mentioned, in the U.S., we saw continued sequential improvement in quarterly comparable store sales from minus 9% in the prior quarter to minus 5% in Q1. As we entered Q1, October improved modestly to minus 3% from minus 4% in September. Then, as the quarter progressed, U.S. comparable store sales were minus 4% and minus 8% in November and December respectively, primarily due to pandemic-related operating restrictions across several states, which impacted customer mobility. As Kevin also noted, approximately 40% of our U.S. company-operated store base was offering limited seating at the end of the quarter, down from more than 60% at the beginning of the quarter. So, we are quite pleased with our comparable store sales performance in Q1 in light of these increasing restrictions. Americas Q1 non-GAAP operating margin contracted 320 basis points from the prior year to 18.8%, primarily due to the impact of COVID-19 including sales deleverage and additional costs incurred as well as growth in retail partner wages and benefits. These impacts were partially offset by improved labor efficiency driven in part by order consolidation and sales mix shift as well as pricing. Notably, this represented a significant improvement from the previous quarter's non-GAAP operating margin of 16.7%. Moving on to International, the International segment delivered revenue of $1.7 billion in Q1. Excluding a 5% favorable impact of foreign currency translation, the segment's revenue in the quarter was flat relative to the prior year, reflecting 8% net new store growth over the past 12 months offset by lower product sales to and royalties from our international licensees as a well as a 3% decline in comparable store sales, primarily due to COVID-19 inclusive of a 3% VAT benefit. In China, comparable store sales grew 5% in Q1, including VAT favorability of nearly five percentage points, were slightly positive when excluding the impact of VAT for the quarter. In line with our previous outlook, we substantially recovered our sales in China by the end of calendar 2020 even when excluding the temporary VAT benefit, demonstrating the strength and resilience of the Starbucks brand in our fastest growing market. In December, China's comparable store sales were up 4% or only slightly negative when excluding the nearly five percentage point VAT exemption benefit for the month, an improvement from October and November when excluding each month's VAT exemption benefit and setting aside the mid-Autumn festival seasonal shift that benefited October. International's non-GAAP operating margin declined by 100 basis points to 20.4% mainly due to sales deleverage as a result of the pandemic, partially offset by improved labor efficiency. Much like the Americas, this represented a very significant improvement from the previous quarter's non-GAAP operating margin of 16.3%. On to Channel Development, revenue was $371 million in Q1, a decline of 25% from the prior year, primarily due to a 22% unfavorable impact of Global Coffee Alliance transition related activities, including a structural change in our single-serve business. When excluding the impact of these transition related activities, Channel Development's revenue declined by 3% in Q1, mainly driven by the adverse impact of COVID-19 on the segment's foodservice business, partially offset by growth in our Ready-to-Drink business. The segment's non-GAAP operating margin expanded to 48.7% in Q1 from 36.6% in the prior year. Normalizing for the 840 basis point impact of Global Coffee Alliance transition related activities I just mentioned, Channel Development's operating margin expanded 370 basis points in Q1, driven primarily by the strength of our Ready-to-Drink business. Finally, at the consolidated level, non-GAAP operating margin was 15.5% in Q1, down from 18.2% year-over-year, but a substantial improvement from 13.2% in Q4. Unsurprisingly, much of the year-over-year reduction in our operating margin for Q1 was due to sales deleverage attributable to COVID-19 as well as growth in wages and benefits, partially offset by store labor efficiencies and pricing in the Americas. Moving on to our guidance for fiscal 2021 and starting with GAAP EPS. In Q1, GAAP EPS was $0.16 higher than the upper end of our guidance range, primarily reflecting lower than expected restructuring costs related to our trade area transformation initiative. This upside was attributable to two things. First, a shift in the timing of store closures to future quarters and second, a reduction in average restructuring cost per closed store. As we expect these lower restructuring costs to sustain, we are raising our full year fiscal 2021 GAAP EPS guidance by $0.08 from a range of $2.34 to $2.54 to a new range of $2.42 to $2.62, both inclusive of approximately $0.10 for the 53rd week. Now, moving to non-GAAP EPS guidance. Our strong start to the year combined with a tailwind from foreign currency translation as evidenced in our Q1 results provides optimism that we have the potential to exceed our full year non-GAAP EPS guidance barring of course, any new significant and sustained waves of COVID-19 infections and any major economic disruptions. However, given where we are at in our fiscal year with three quarters to go and considering that we're continuing to see volatility from the pandemic, we believe it is prudent to provide a comprehensive guidance update with our second quarter earnings report, by which time we'll have much better visibility to full year results. Therefore, setting aside the updated fiscal 2021 GAAP EPS guidance I just mentioned, we reaffirm all other full year fiscal 2021 guidance for now including non-GAAP EPS in the range of $2.70 to $2.90, again, inclusive of approximately $0.10 for the extra week. We will however provide guidance for selected Q2 metrics given our better visibility to near-term trends which provide further evidence of recovery in line with our overall expectations. In the U.S., we expect to report a comparable store sales decline of approximately 2% for the month of January, representing a marked improvement from December's 8% decline. Then, as we lap material adverse COVID-19 impacts in the month of March, we expect U.S. comparable store sales growth of approximately 5% to 10% for the second quarter. This is consistent with our previous outlook that we would achieve full sales recovery in our U.S. business by the end of Q2 with a two-quarter lag beyond that before we expect to see full margin recovery. In China, we are seeing another wave of COVID-19 infections in selected provinces and a corresponding impact to customer mobility and store operating protocols. In addition, we started to lap material adverse COVID-19 impacts last week and this will continue through the remainder of Q2. Combining these two items, we expect to report a comparable store sales decline of approximately 7% for the month of January and comparable store sales growth of nearly 100% for the second quarter, reflecting very significant lapping effects in the months of February and March. On a two-year basis, that would equate to roughly flat compound growth in the second quarter as we move through the one-year anniversary of COVID-related store closures and return to our long-term growth algorithm in China. From an EPS perspective in Q2, we are expecting GAAP EPS in the range of $0.36 to $0.41 and non-GAAP EPS in the range of $0.45 to $0.50. These estimates reflect the comparable store sales growth estimates that I just provided as well as the normal margin seasonality we see in our business comparing Q2 to our holiday-driven Q1. To be clear, except for GAAP EPS, the rest of our full year fiscal 2021 guidance metrics are unchanged from what we communicated with our Q4 fiscal 2020 quarterly earnings report. This includes our expectation that our retail operating segments will deliver significant margin improvement on a non-GAAP basis as fiscal 2021 progresses, yielding meaningfully higher EPS in the third and fourth quarters than the first two quarters of the year. To summarize, we are delighted with the pace of business recovery in Q1 and the momentum that it provides for fiscal 2021, our China market has substantially recovered, although it is experiencing recent volatility and our U.S. business is on track to fully recover in the current quarter as we previously communicated. As a result, we remain confident in the strength of our brand and the durability of our growth model. I want to express my appreciation to our green apron partners for the critical role that they continue to play in our overall business recovery. Before I conclude, I'd like to thank Kevin and the Starbucks team. It has been an honor to be a Starbucks partner and I am proud of what we've accomplished as a team to unlock considerable shareholder value over the past two years. I am thrilled to pass the CFO baton to Rachel Ruggeri, a key member of our senior finance team. Rachel and I have been partnering to ensure a smooth transition and I would like to invite her to share a few words on this call. Thank you. Rachel? Rachel Ruggeri: Thank you, Pat. I'm honored and humbled to assume the role of Chief Financial Officer at Starbucks. In my 16 years with the company, Starbucks has never been better positioned for long-term growth and I look forward to working with Kevin, our executive leadership team, and of course the partners around the globe to unlock that growth with focus and discipline. And to our investors and financial analysts who have joined us today, I very much look forward to speaking with you soon. And with that, I will turn today's call over to the operator to begin our Q&A session. Operator? Operator: Thank you. Your first question comes from John Glass with Morgan Stanley. Please proceed with your question. John Glass: Thanks very much and congratulations to Pat and Roz on your new ventures. Good luck and we will miss you. Pat or Kevin or Roz or all three, how do we think about the dynamic between check growth and traffic growth in the coming quarters? I mean we've never seen this kind of dynamic where traffic has fallen so much, check has gone up. How do you think -- do you think it just sort of -- just normalizes? Or is it chance? Or is there programs to continue to get that check benefit even as traffic recovers or maybe there's an outperformance on comp on that basis? And Pat, how much benefit to margin has that decline in traffic and bundling of orders benefited? How we think about the margin impact as traffic comes back, but maybe those check averages come down over time? Kevin Johnson: Yes, John, this is Kevin. Let me share a perspective on that. First of all, a big reason for the increase in ticket is group ordering. And certainly, as we have grab and go and customers are looking for safe, familiar convenient experiences, customers are coming in and they are purchasing multiple beverages, multiple food items for larger groups than in the past, which is why traffic is down and ticket is up. That said, I think, as we start reopening seating in our stores, as vaccinations continue to propagate around the world, we're going to see that normalize, but I do think there's going to be a long-term positive impact on ticket. I do think through this period, I think, customers have gotten very, very used to more premium beverages, more higher degree of food attach. And I think -- I don't -- I actually think ticket will come out of this higher than it was when we went into it while transactions recovered. Now, how long that takes? I think that's a function of how vaccinations unfold in different markets around the world and how quickly people get back to more normal foot traffic patterns and more normal work and school patterns. And let me just ask if – Roz, if you want to add any additional perspective on that as it relates to the U.S.? Roz Brewer: Yes, Kevin, I do. There's a couple of things here to think about in terms of the contributors. Kevin mentioned the higher beverage attach, the higher food attach. There's also the shift to cold beverages. And what we see in cold beverages is a couple of things. If you think about the decline in transactions that we've seen in our central business districts and our metro markets, those areas carry single beverages, and they were higher than average brewed coffee and those grew really at a lower range than our ticket options. So, what we're doing in beverage innovation is replacing that with cold beverages and replacing that with plant-based. And so that's why we're seeing this improved food attach. And so we feel confident that those kinds of innovations are going to keep that ticket higher than what we've seen in the past. Kevin Johnson: Pat, you want to take a second part of John's question? Pat Grismer: Yes. Thank you. In relation to the impact of the higher ticket on margin and how we expect that to normalize over time, to Kevin's point, we do anticipate that some of that ticket growth will sustain and with that some margin benefit will linger, but there will be as customer behavior normalizes, some reversal -- some of that margin benefit. But it's important to highlight some of the other ongoing initiatives underway in our store operations to build new levels of productivity, whether the deployment of handheld POS to improve throughput at the drive-thru and how we believe that will not only increase our capacity, but deliver some margin enhancements, or what we're doing to deploy new equipment, both new espresso machines as well as new ovens that help us to reduce transaction times out the window, or just ongoing operational engineering work to ensure that our operating routines -- we've adopted new protocols continue to achieve higher levels of efficiency in terms of how we deploy our labor. So, there are a number of other activities underway that will drive new levels of productivity and unlock further margin benefit even as some of the sales activity normalizes and with that reverses some of the margin benefits that we've seen here recently. Operator: Your next question comes from Sharon Zackfia with William Blair. Please proceed with your question. Sharon Zackfia: Hi, good afternoon and congratulations, Roz, on the news, but we'll be sad to see you go. I guess I had a question on Stars for All, and it's probably best directed to Roz. As you rolled that out, clearly, you saw the membership jump in the U.S. I mean, how much of that is directly related to Stars for All, if you could kind of quantify that? And then any kind of quantitative elements on potentially how these Stars for All members differ from pre-existing cohorts of members and how you've kind of trended and potentially upselling them to the higher level of Starbucks Rewards? Roz Brewer: Great. Thank you, Sharon, for that note of congratulations. So, just a little bit on SFE. The story behind SFE is we provided for our customer base the option for payment removal. And we knew that was one of the most significant sections that we had in growing our Starbucks Rewards members. So, this strong member growth that we're seeing is not only surpassing our pre-COVID highs, but it's pushing well behind and you saw the numbers, 22 million active members, that's up 15% year-over-year. And it's helping us really fuel the all-time highs that we're seeing in Starbucks Rewards as they convert. And right now, our Starbucks Rewards percent of tenders is reaching nearly $0.50 -- 50%, as Kevin mentioned. So, we are seeing some significant improvement with Stars for Everyone. Also, too, quarter-over-quarter, our mobile app downloads grew by plus 5% and our acquisitions grew 13%. So, we're seeing some significant movement in there in terms of how the conversion rate. The everything you asked for if there's any qualitative difference between who we're seeing coming in, we're just seeing just an expansion of our customer and just more love for the brand as we apply SFE. And so really, we don't have the exact numbers in terms of qualitatively how they differ. We just know that we have addressed a significant concern with payment removal. So, we're pleased with what we see so far. Operator: Your next question comes from the line of David Palmer with Evercore ISI. Please proceed with your question. David Palmer: Thanks and congrats everybody on their new roles. All the best Pat and Roz. Question on capacity and throughput. I mean, look, going back to the mid-2000s, I can think of times when Starbucks talked about reaching near capacity levels. And, of course, some of those comments seem funny now, given the fact that you've come so much further in terms of your AUVs, especially after all you've done with mobile order and pay in terms of smoothing out the service for that and then the drive-thru expansion has also raised that. But I go by those drive-thrus and a lot of them look pretty full. And I wonder about the post-vaccine world and how much you think about capacity utilization or basically coming up on these bottlenecks, particularly in the drive-thru as we get to a post-vaccine reality. Could you talk about that? And what you might be working on to maximize your growth after the vaccine? Thanks. Kevin Johnson: Yes, Roz, why don't you take that and go through a little bit of the initiatives that we've done to increase throughput on the different channels? And then maybe I'll comment, but why I don't I let you take that question. Roz Brewer: Sure. So, we have quite a bit of work happening around our service experience and everything that we're seeing around the drive-thru as we have so many of our stores in the drive-thru position right now. First of all, let me speak about our future real estate. When we looked at our most productive model, it is the drive-thru. So, in our go forward position, you'll see an increased number of drive-thrus that we're building in the Central United States and across the Southeast and the Southwest. So, drive-thru in terms of the numbers will grow. Also, two, there are three main approaches that we have to enhance the drive-thru productivity. First of all, is to optimize the current state. And that's looking at our operation standards and that's the focus on driving our increased out the window times. And so that's reinforcing all of our processes in store making sure that our baristas can operate efficiently and that's the ongoing work that we will do. The second piece is we're developing and testing some drive-thru forward solutions and that includes our handheld POS, which right now we have about 300 drive-thru stores with handheld POS and we'll have 500 of those stores by the end of February. And so we're also adding to that the tech improvement to make orders more easily managed through our consolidation and handoff. We call that our bump bar replacement. And then in addition, we're also targeting the renovation of 150 drive-thru constraint stores that have either issues in terms of meeting the new productivity model from an engine design or removing the pastry case and getting things situated, single point of sales and other solutions. And then there's a final piece, the future drives for concepts and those are things like drive-thru-only stores that have no seating, very small units, the side-by-side drive-thru lanes that we are bringing on to the footprint. So, it's -- we've got considerable work in this area to unlock the full potential for drive-thru. Operator: Your next question comes from the line of John Ivankoe with JPMorgan. Please proceed with your question. John Ivankoe: Hi, thank you very much. I would actually like to pivot from that question. In terms of opportunities for the 40% of stores that do not have drive-thru, that do have seating, that the maybe the possibility of a drive-thru even on relocation isn't even possible within the trade area, could you have like some of the things that you can do to increase throughput overall consumer usage, whether on a late-COVID basis, or even a post-COVID basis to make that cohort of stores more productive? That's the first question. And then secondly, if I can sneak it in considering that the transactions which are down all set, obviously, by via by ticket, you know, labor hours, presumably are down at the store. Do you have a sense of how variable labor should be? In other words, if transactions increased by 10%, is there a type of percent that you would think labor hours should increase this as we kind of think about rebuilding the models for the out years. Thanks. Kevin Johnson: Thanks John. Roz, why don't you take the first question that John asked, and then Pat will follow-up on the second question that he asked. Roz Brewer: Yes, John. Thanks for the question. So, thinking of productivity and models that may not have a drive-thru, we're looking at everything to that we can do on the inside of the building. As Pat mentioned, we have our next generation espresso machine that actually allows us to have a much faster pool with multiple coffee offerings. And then also two, we have our new warming ovens and those have also an improved operational times and standard improvements. It's also important that we talk about the work that we're doing with deep brew and this -- and deep brew is our work that allows us to apply AI to our equipment and the processes in the store and that's improving productivity within the store. So, there's considerable work that's happening in our cafe seated stores. And you'll see those things roll out over the next several quarters here. Pat? Pat Grismer: And John, as to your question regarding variable labor, what we focus on his flow through on variable sales and that's particularly important as we expect continued sales recovery and then back into growth in the back half of the year. And even as we continue to make significant new investments in the middle of P&L in order to unlock future growth opportunity, we fully expect very meaningful sales leverage that comes with what we target as an approximate 50% flow through on those variable sales. And that includes what we derive by way of leverage on fixed labor. So, there is a variable labor component that is embedded in that calculation. But importantly, it acknowledges that there is a fair portion of our total cost structure inclusive of labor that is fixed in terms of how we operate these stores. So, as we recover sales and further build from that point, we anticipate margin expansion as a consequence of sales leverage that helps to offset the impact of the additional investments we're making to unlock future growth. Operator: Your next question comes from the line of Sara Senatore with Bernstein. Please proceed with your questions. Sara Senatore: Great. Thank you. I wanted to ask about China, please. Obviously, that was a very strong 5% comp, I was wondering if you could just talk about in the past, in the context you've given for potentially slower China comps for competition, and also intentionally opening new stores and sort of own cannibalization, if you will? Year ago, if I look back, you had kind of 3% comp and 16% unit growth, and now you're 5% comp and 13% unit growth. Could you maybe talk about how much of this comp, which certainly again, very strong, especially considering even -- and flat, even ex that, how much of that -- my bet would be a function of less cannibalization versus less competition. And related to that I think new unit economics are still very good, but maybe down a little bit from where they were. So, just trying to understand what the sort of competitive and operational environment look like now? Kevin Johnson: Sara, thanks for the question. Maybe, John, I'll have you talk a little bit about what's happening in China new store growth and how we continue to drive China. And then let's go to Pat, Pat can reinforce kind of our view on the long-term growth model for China that we outlined at the Investor Day in December. John Culver: Okay. Thanks for the question, Sara. And clearly, we're very proud of the work that team in China has done to navigate the COVID situation and the current surge that we're seeing in the market to basically substantially recover and in line with our expectations for the quarter and deliver a 5% comp, topline growth rate of 15% and an acceleration of new stores to 160 in the quarter is really remarkable given the current environment that we're operating. And we continue to be very optimistic about the long-term growth opportunity and the continued recovery that is going to take place throughout this fiscal year. Our new stores continue to perform very well. As I said, we opened 160 stores, 30% growth over the last 12 months and that includes a time period where we slow down or halted all store growth as we navigated the COVID crisis beginning last year at this time. We're seeing really strong performance and uptick with the Starbucks Now expansion. We're opening 24 cities -- I'm sorry, opened 24 stores in nine different cities in the quarter and we have a total of 40 stores and we'll continue to expand that concept. And then the last piece beyond the store piece is the acceleration of digital and the digital footprint. And Kevin hit on this a little bit in his comments, but this is also fueling the growth during the pandemic as we navigate. Our 90-day actives increased at 15.4 million members, that's 56% increase over the previous year and that's 14% increase over the previous quarter, which is great. And then clearly mobile order sales mix at 30% with MOP at 16% and deliver at 14% is strong growth. So, our total mobile order sales are now two times what they were last year at this time. So, clearly we have put in place a model that has been able to navigate the pandemic environment. And we feel very optimistic and delivering the delivering the guidance that path look forward of achieving the 100% comp for the second quarter and relative with flat growth on a two year basis for the market. Pat Grismer: Thanks John and Sara to build on what John has said to put into perspective how we're thinking about comp growth in China long-term, you may recall at our December 2018 Investor Conference, we guided China comp growth of 1% to 3%. In recent quarters, we had delivered in the low single-digits. And we acknowledged at the time that as a consequence of a more tempered pace of growth in the broader economy, intensified competition and the sales transfer that comes from an aggressive pace of new unit development, that 1% to 3% was a reasonable expectation. Fast forward to our Investor Day, just a couple of months ago, where we updated that to a new range of 2% to 4%. I would say in relation to the factors I mentioned, no material change to the economy, competition, or sales transfer. But importantly, as John mentioned, significant improvements in our digital capability and how that has all resonated with our customers in China, which underpins our confidence in raising that long-term comp guidance range for China to this 2% to 4%, which we believe is quite powerful in the context of very aggressive unit development given the strong appeal of our brand and the outstanding unit level economics that delivers superior returns for us in China. John Culver: And Sara just one of the things that I would just add, as well, is -- and Kevin hit on this a little bit in terms of the strength of the Starbucks brand in the market. And clear -- we are the clear leader in terms of brand affinity and visitation across all coffee houses. We're the first choice in away-from-home handcrafted coffee beverages for customers. And as a matter of fact, one in two consumers prefer Starbucks versus anybody else's coffee in the marketplace. So, we feel we're in a very strong position from a consumer standpoint and a customer perspective to really emerge out of the challenges that we're facing in a very strong way and that gives us confidence for the future. Operator: Your next question comes from the line of Jeffrey Bernstein with Barclays. Please proceed with your question. Jeffrey Bernstein: Great. Thank you. Pat, congrats on retirement and Rachel, congrats on your new role. And Roz, based on the headlines coming out now, I guess look forward to seeing you at Walgreens, hopefully selling lots of Starbucks coffee. My question is on the labor side of things, which seems to be very topical, and happy to hear you guys talk about ongoing efficiencies. But when people talk about labor lately, it seems like there's a lot of opposing forces, obviously, you have the national minimum wage potentially going up on one. But then you have the elevated unemployment, which historically implies ample labor and therefore managing your costs better. So, just wondering if you can provide any thoughts in terms of your labor cost, and maybe employee availability outlook? I know you guys are an employer of choice, but your ability to offset the pressure, whether it's request saves technology, menu pricing, how you kind of think about those offsetting forces from a labor cost perspective? Thank you. Kevin Johnson: Yes, Jeffrey thanks for your questions. Let me kind of lead off with the perspective and then I'll hand over to Pat to put some numbers around it. But fundamentally look we believe in investing in our partners, it is our green apron partners who create that experience for our customers. And so we know when we invest in our partners and put them in the position to do the best job they can and serving our customers that our customer connection scores go up and our traffic goes up, and our sales go up. There's a direct correlation between investment in partners, customer connection scores, and traffic increase. And I think that's the first thing to note. So, that's why you saw us make a fairly significant increase in wage and benefits here in the U.S. as we went into this fiscal year. Second, then we find ways to help offset some of that in two ways. Number one is just productivity and throughput. We have a 20,000 square foot Tryer Center, we call it our Tryer Center, and think of it as a Silicon Valley incubation lab, right downstairs here in Seattle. And we have some of the world's best human-centered design engineers that work down there with our partners, to find ways to help them improve their productivity. Oftentimes, it has to do with the store layout, oftentimes it has to do with the equipment, what kinds of ovens, what's the -- how can we make things easier for partners to do their jobs. And so that helps offset some of that increase in wage. And then the other is automating administrative tasks. Things that whether it's -- we've had -- we've got deep brew helping automate inventory management stores, helping reduce the amount of time that partners have to count inventory and fill out forms and now technology is playing a role doing that. Other examples our Mastrena II machines that we're putting in our stores have -- are instrumented with Internet of Things sensors in them. And those sensors every shot of espresso, it sends telemetry data back to our data center. And through machine learning, we can predict when a when it is one of our Mastrena machines needs to be maintained, or needs to be cleaned or calibrated. And by doing that, we prevent the situation where perhaps the partner comes to open the store in the morning and one of the Mastrena machines is down. So, technology to automate administrative tasks that help provide the best environment for our partners to do what they do best, which is handcrafted beverages and connecting with our customers. And then the way that we get productivity by just thinking about the human-centered design experience we create for partners in the stores. That helps offset the increase. And Pat I'll hand to you to help add a little bit more numerics around that. Pat Grismer: Thank you, Kevin. What I would add is that much -- the same way I talked about China, is how we're thinking about the U.S. in relation to improved comps on the back of investments we're making in the brand with investments in our store partners being a critically important investment. And to put that in numerical terms, a couple of years ago, when we guided at our Investor Day, at the time a 3% to 4% comp expectation for our U.S. business. More recently at our Investor Day, we raised that to a range of 4% to 5%. And that is entirely the result of our confidence in the returns that we will get on these investments led by investments in our partners, but also significant investments in our digital platforms. And what that does to unlock the full sales potential of a Starbucks brand, yielding significant sales leverage that not only pays for these investments, but enables what we continue to expect by way of modest annual margin expansion, which is a fundamental part of our ability to convert revenue growth long-term of 8% to 10% to operating income growth of 9% to 11%. So, as Kevin mentioned, all of these things work together, investment combined with productivity to combine further with sales leverage to land the ongoing margin expansion that forms a fundamental part of our overall earnings growth model. Operator: Your next question comes from line of Andrew Charles with Cowen. Please proceed with your question. Andrew Charles: Great. Thank you. Just echo everyone else Pat and Roz. Best wishes in your next chapter and Rachel, good luck in your new role as well. Kevin, a question for you following the announcements that Roz and Pat will be departing in the coming weeks, while the business will be in the very capable hands of partners that have been with Starbucks for over 15 years, where are you going to be leaning in in the near-term to help ensure continuity and recovery? Kevin Johnson: Yes, Andrew, thanks for the question. Certainly, with -- on the CFO side, Rachel, -- Rachel's been a long-term Starbucks partner and our finance organization and supporting the America. She is fully up to speed on Starbucks and all things related to driving this business. And so great confidence there. And Roz's organization, as I flatten the organization, I'm going to take Rossann Williams and Brady Brewer direct to me. Rossann has been running our U.S. -- North American business now for over two years doing a great job on that and Brady's our Chief Marketing Officer. So, certainly I think that stability of leaders running North America and the stability of Rachel and her knowledge of the Americas and stepping into the global CFO role gives me great confidence. And I'll say this; we've got a very strong bench of talent in Starbucks. And what you're seeing is the next generation of leadership stepping into these roles and I've got great confidence in them. And so certainly, I'm going to continue to do what I do, which is we work as a leadership team, we work together as a team based on trust, transparency, and teamwork. And these leaders Rossann and Brady have been on the executive leadership team now for over a year. Rachel will join us on the leadership team, but we won't miss a beat and very grateful to both Pat and Roz for their contribution, because not only did they contribute, but they also built great successors in their roles. And I'm very grateful. Operator: Your next question comes from line of David Tarantino with Robert W. Baird. Please proceed with your question. David Tarantino: Hi, good afternoon. My question is for Pat and its related to the upside in your Q1 earnings performance relative to the guidance. Pat, could you maybe unpack the factors that drove the upside relative to what you were thinking at the start of the quarter or whenever you gave the guidance? And then also, can you give us some perspective on whether that upside reflects maybe benefits that are coming in earlier than you anticipated or greater than you anticipated? And I guess the context of that second part is, how should we think about this flowing through to the 2022 outlook, for example? Pat Grismer: Yes, thank you, David. So, we were very pleased with our A1 results with non-GAAP EPS exceeding the midpoint of our guidance range by approximately $0.08. Picking that apart about $0.05 of that favorability was driven by our business segment performance, including better than expected margins in both the Americas and International and other $0.02 we'd attribute to favorable foreign currency translation, and the remaining $0.01 attributable to a lower than expected tax rate, which is driven by unplanned discrete tax benefits. As to the business performance, we do expect that momentum to sustain balance of year. So, as I mentioned in my prepared remarks, we believe that it is possible that we could deliver full year results ahead of the guidance we've given. However, when you consider where we're at in our fiscal year with three quarters to go and when you also consider the continued volatility and the operating environment. It's prudent to hold at this stage. And that's what we've chosen to do. We've decided to hold our full year non-GAAP guidance, until we close Q2 and have half the year under our belt, we will then have much better visibility to the back half of the year and can make a more considered call on what guidance update may be appropriate at that point in time. But we are very encouraged by what we've seen thus far. Even with the recent volatility we've seen in China, we could not be more delighted with the accelerated recovery we've seen in our U.S. business going from a minus 8% comp in December to a minus 2% comp in January, well on our way to achieving the full sales recovery that we outlook for the U.S. business by the end of our second quarter, fully expecting the quarter to come in that 5% to 10% sales growth, that's comparable sales growth for us business. So, when you add it all up, there's every reason to be optimistic. It's just a matter of prudence. Again, given where we're at in our year and the fact that the pandemic is still impacting our business in different ways, but we're really pleased with the resilience we've built into our business and that's reflected in our results. Operator: Our next question comes from the line of Dennis Geiger with UBS. Please proceed with your question. Dennis Geiger: Great. Thanks for the question and congrats to all on new opportunities and your new roles. For Kevin and Roz, I think you talked about the strength in food and the higher food attached. I think generally food's been a pretty strong contributor to sales and comp for the last several years now. But it's felt like maybe food has been a little bit deemphasized over the last couple of years given the increased focus on beverage. Wondering if you could -- based on what you've seen recently in the last few quarters -- specifically this last quarter, does it change -- and maybe how you're thinking about customer behavior is changing going forward, does it change at all how you're thinking about the food opportunity going forward from here? Whether it's anything different on innovation, potential partnerships, or just leaning in a bit more on that opportunity? Kevin Johnson: Yes, Dennis, thanks for your question. Let me let me share our perspective. And then Roz, I'll hand to you to add a bit more from the U.S. perspective. But Dennis, strategically, we are a beverage-first company; we are in the business of handcrafted beverages, personalized for each and every customer around coffee and tea. And it's that experience we create around handcrafted beverages. And that's why we amplify -- we talk about our innovation, it's around customer experience, it's around relevant new beverage innovation, and it's around digital customer relationships. And by focusing and understanding that we are a beverage-first company, that what we do is create that experience around those handcrafted beverages has been very important in the growth that we've been driving. And so we talk about that a lot, we focus on that a lot, because that is, at the end of the day, what is it a significant differentiator for Starbucks. Now, we then attach food and so nothing -- food's not important, but we're very clear, strategically, the most important thing is to be on the front foot and innovate and drive those relevant beverage platforms and then and then differentiate through the fact that our Starbucks partners in our stores, handcraft those beverages personally, for each and every customer, and then we attach food. Now, when we attach food, we -- our R&D teams have been very thoughtful about how to have the food menu, be relevant to the day parts and to the beverages that we sell. And they've done a phenomenal job with that over the years and if I were to say what is the probably the most dominant shift in consumer behavior is this whole shift to plant-based. And that is a shift both in beverage and in food. On the beverage side, this is why we've introduced all the alternative milks, whether it's almond milk, soy milk, oat milk, all of that's important. And then on the food side, you see what we've done with things like the Impossible Sausage Breakfast Sandwich and you're seeing more and more plant-based proteins in our food menu. And in fact, we have one Starbucks store here in the Seattle area that we've gone to 100% plant-based food menu. We use that as sort of a test area when we innovate and create things here in our Support Centre -- in the Tryer Center, we test in that store. So, if I think about both beverage and food, and the number one trend that I would highlight there is just a consumer shift in consumer preferences around plant-based. And Roz let me hand to you, you might have some additional numbers and color to add to that, but I think at a macro level, those are the two most important points, I think, Dennis. Roz Brewer: Yes. So, Kevin, I think you hit a pretty strong there in terms of us really aligning with customer preference. I will say that the work that our team has been doing around our digital platform and getting to know our customers better than we've ever known them before, we're understanding how their preferences are trending. What this is also allowing us to do is to make great coffee as well, because now we're learning how to match and pair coffee with great food and beverage items so that we bring together both a food and beverage combination. So, the work ahead of us, by no means minimizes food, actually, we see it as a golden opportunity for us to just further expand our presence and create quality, food attach items to go along with great coffee. Operator: Your next question comes from the line of Jon Tower with Wells Fargo. Please proceed with your question. Jon Tower: Awesome. Great, thanks. Just quickly clarification and then a question. First, a clarification, on the slower pace of store closures that I think you'd mentioned earlier in the transcript, is there an expected revenue impact in 2021? And does the 40 basis point margin benefits still stand from those closures? And then my question is on the China loyalty members and the platform. Obviously, very impressive growth here and I was hoping maybe you could offer some insights into how customers in that market are using the brand now versus in the past perhaps differently you're seeing either day-part changes or ticket growth and I know obviously COVID might be muddying the visibility here and exactly understanding what the trends are, but if you could offer some insights into day-part usage, ticket growth, obviously frequency changes around the platform that would be great. Kevin Johnson: Jon, thanks for your questions. We'll have Pat take the first clarification that you asked for and then John Culver will comment on China loyalty member of behaviors. Pat Grismer: Yes. Thank you, Kevin. So, Jon, with respect to trade area transformation progress, as of the end of Q1, we had completed approximately one-third of the store closures included in our trade area transformation initiative and expect to complete the majority of remaining closures by the end of this fiscal year as originally planned. So, there has been a bit of a delay relative to what we had anticipated at the beginning of the year and that's entirely a function of how thoughtfully the team is continuing to refine the store closure plans based on how we read the impacts we're seeing from stores as they are closed in terms of both sales transfer and margin with a view to continue to optimize as we go. But we're as committed to that program now as we were at the start of the year and even back to June when we first announced it and then subsequently expanded the program. As to the margin impact, we continue to expect about a 40 basis point improvement to our consolidated margin or enterprise margin on a full year basis. So, even with a slight delay to some of the closure activity, we continue to expect meaningful margin expansion as a result of this initiative. John Culver: And Jon to your question on China and the digital and what we're seeing a little bit deeper dive on it. First off, the day-part impact we've really seen an uptick in the morning day-part, but pretty much the recovery is taking place across all day-parts consistently. But from a digital mobile order and pay perspective, we are seeing an uptick on the morning side. In terms of the ticket, as it relates to digital, we are seeing ticket consistent with what we've seen previously. Generally, in China, our ticket runs a bit higher than the U.S. under normal circumstances that is because of group ordering and I would say our ticket is living up to that historical performance. The other aspect that we're seeing is social gifting and social gifting is a big piece of digital in China. We've introduced that as part of the Rewards program and we're seeing a nice uptick of that as well. So, very pleased with the progress the team is making there and we're going to continue to invest and double down on our digital footprint in China. Operator: The last question comes from Chris O'Cull with Stifel. Please proceed with your question. Chris O'Cull: Thanks. And thanks for getting me in. Pat, my question is related to the plant-based beverages, is the shift to plant-based beverage is a positive for margin on the beverage side or does it compress the profitability relative to milk-based drinks all else equal? And how does continued optimization of the supply chain impact that dynamic over time? Pat Grismer: Thank you for the question, Chris. I would say that from a margin perspective, currently, the impact is a little bit of a push because while there is incremental cost associated with those alternative milks, we do charge a premium and so that helps to mute the impact to margin. I would say much longer term, it remains to be seen. A lot of it will depend on how consumers increasingly migrate to those alternative milks, not just in our business, but broadly in a way that supports increased production, which should over time reduce the cost and then we have the opportunity to reevaluate whether at some stage it makes sense to change our pricing practices. I would say generally speaking, our goal is to maintain, if not expand our margins over time. Operator: And that was our last question today. I will now turn the call over to Mr. Johnson for his closing remarks. Kevin Johnson: Well, I want to thank you all for joining us today and I also wanted to invite you to join us on March 17th for our Annual Meeting of Shareholders. It will be a virtual meeting where we will celebrate Starbucks and reflect on our journey over the last 50 years since the founding of the company in 1971, while at the same time looking forward to a very bright future and we hope that you join us for that virtual meeting and we'll look forward to seeing you or participating with you on March 17th. Thank you everybody. Operator: This concludes Starbucks Coffee Company's conference call. You may now disconnect.
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Starbucks Corporation (NASDAQ:SBUX) Financial Performance and Market Position

  • Earnings Per Share (EPS) of $0.69 exceeded estimates, despite a decrease from the previous year.
  • Revenue reached approximately $9.4 billion, slightly surpassing expectations and consensus estimates.
  • Financial Ratios highlight valuation and financial health, with a notable P/E ratio of about 30.36.

Starbucks Corporation, listed on NASDAQ as SBUX, is a global leader in the premium coffee market, operating over 40,000 locations worldwide. The company is known for its specialty coffee and beverages, and it competes with other major coffee chains like Dunkin' and McDonald's. Starbucks has a strong brand presence and continues to expand its global footprint.

On January 28, 2025, Starbucks reported earnings per share (EPS) of $0.69, slightly above the estimated $0.68. This performance also exceeded the Zacks Consensus Estimate of $0.66, marking a 4.55% surprise. However, this is a decrease from the $0.90 EPS reported a year ago, indicating some challenges in maintaining previous profit levels.

Starbucks' revenue for the quarter was approximately $9.4 billion, surpassing the estimated $9.3 billion. This figure was slightly above the Zacks Consensus Estimate by 1.02%, but it represents a small decline from the $9.43 billion reported in the same quarter the previous year. Despite these positive results, the company faced a 4% decline in global comparable store sales, highlighting ongoing challenges in the market.

The company's financial ratios provide insight into its valuation and financial health. Starbucks has a price-to-earnings (P/E) ratio of about 30.36, indicating that investors are willing to pay over 30 times the company's earnings. The price-to-sales ratio is around 3.15, suggesting that investors pay $3.15 for every dollar of sales. The enterprise value to sales ratio is approximately 3.77, reflecting the company's total valuation relative to its sales.

Starbucks' debt-to-equity ratio is negative at approximately -3.46, which may indicate a higher level of debt compared to equity. The current ratio is about 0.75, suggesting potential liquidity concerns as the company has less than one dollar in current assets for every dollar of current liabilities. Despite these challenges, BTIG managing director Peter Saleh describes Starbucks as being in the "early innings" of a turnaround story, indicating potential for further growth and development.

Starbucks Corporation (NASDAQ:SBUX) Maintains Strong Position Despite Competitive Pressures

  • Citigroup maintains a "Buy" rating for Starbucks Corporation (NASDAQ:SBUX) with a stock price of $99.51 and a consensus price target of $106.
  • Starbucks to implement new policies to address a 5% decline in North American transactions, aiming to improve customer experience and boost sales.
  • Despite anticipated declines in financial performance, Starbucks receives a "buy" rating from more than half of the analysts, with a market capitalization of approximately $113.4 billion.

Starbucks Corporation (NASDAQ:SBUX) is a global coffeehouse chain known for its specialty coffee and beverages. The company operates thousands of stores worldwide, offering a variety of products including coffee, tea, and food items. Starbucks faces competition from other coffee chains like Dunkin' and McDonald's, which also offer similar products. Despite the competitive landscape, Starbucks remains a dominant player in the coffee industry.

On January 27, 2025, Citigroup maintained its "Buy" rating for Starbucks, suggesting that investors hold onto their shares. At that time, the stock was priced at $99.51. This recommendation comes as Starbucks prepares to release its first-quarter earnings report, with analysts predicting a decline in both revenue and earnings. Despite these challenges, the stock has a consensus price target of $106, indicating potential growth.

Starbucks is implementing new policies to address a 5% decline in North American transactions in 2024. Starting Monday, only paying customers or their guests can use the company's facilities, reversing a 2018 policy. This change aims to improve customer experience and boost sales. Analysts expect a 4.8% decrease in same-store sales, with earnings per share projected at $0.67 and revenue at $9.32 billion.

Despite the anticipated decline in financial performance, more than half of the analysts covering Starbucks have given it a "buy" rating. Jefferies analysts have noted challenges in product innovation, but investor optimism remains. Of the 16 analysts, 10 have issued a "buy" rating, while four have given a "hold" rating, and two have opted for a "sell." The stock's recent price increase to $100.02 reflects this positive sentiment.

Starbucks' market capitalization stands at approximately $113.4 billion, with a trading volume of 8,775,779 shares. The stock has traded between $98.10 and $100.33 today, with a 52-week high of $103.32 and a low of $71.55. As Starbucks prepares to announce its earnings, investors are closely watching for any signs of recovery or further challenges.

Starbucks Shares Dip 1% on Q4 Earnings Miss

Starbucks (NASDAQ:SBUX) reported fourth-quarter results that fell short of analyst expectations, leading to a more than 1% drop in shares intra-day today. The coffee chain’s earnings and revenue both declined as it grappled with challenges in customer experience and reduced store traffic.

For Q4, Starbucks posted adjusted earnings per share of $0.80, below the expected $1.03, while revenue came in at $9.07 billion, missing the forecasted $9.38 billion and marking a 3% year-over-year decline. Global comparable store sales fell 7%, driven by an 8% decrease in transactions, though partially offset by a 2% rise in the average ticket price.

In North America, comparable store sales decreased 6%, with transactions dropping 10% but a 4% boost in average ticket size.

Starbucks Corporation's Financial Performance and Strategic Shifts

  • Starbucks Corporation (NASDAQ:SBUX) reported earnings per share (EPS) of $0.80, missing the expected $1.02, and revenue of $9.1 billion, below the estimated $9.37 billion.
  • The company is undergoing a strategic shift to refocus on its core offerings amidst disappointing global comparable store sales.
  • Despite financial challenges, Starbucks maintains a price-to-earnings (P/E) ratio of 27.1 and a price-to-sales ratio of 3.03, indicating continued investor confidence.

Starbucks Corporation, listed as NASDAQ:SBUX, is a global coffeehouse chain known for its specialty coffee and beverages. The company operates thousands of stores worldwide, offering a variety of products including coffee, tea, and food items. Starbucks competes with other major coffee brands like Dunkin' and McDonald's in the fast-food and beverage industry.

On October 30, 2024, Starbucks reported earnings per share (EPS) of $0.80, which was below the expected $1.02. The company's revenue for the period was $9.1 billion, also missing the estimated $9.37 billion. This shortfall in earnings and revenue has raised concerns among investors and analysts about the company's financial health and future prospects.

Adding to the company's challenges, Bragar Eagel & Squire, P.C., a shareholder rights law firm, is investigating Starbucks on behalf of its long-term stockholders. This investigation follows a class action complaint filed on August 28, 2024, covering a class period from November 2, 2023, to April 30, 2024. The focus is on whether Starbucks' board of directors breached their fiduciary duties.

Starbucks is also undergoing a strategic shift, aiming to refocus on its core offerings and streamline operations. This move comes as the company faces disappointing global comparable store sales, which could further impact its financial performance. Investors are weighing their options on whether to buy, sell, or hold Starbucks stock amid these challenges.

Despite these issues, Starbucks has a price-to-earnings (P/E) ratio of 27.1, indicating the market's valuation of its earnings. The company's price-to-sales ratio is 3.03, and its enterprise value to sales ratio is 3.63, reflecting investor confidence in its revenue and sales. However, the negative debt-to-equity ratio of -2.14 and a current ratio of 0.89 suggest potential financial risks.

Starbucks Shares Drop Over 3% as Q4 Sales and Profits Fall Amid Weaker US Demand

Starbucks (NASDAQ:SBUX) shares fell over 3% in pre-market today after the company released disappointing preliminary results for its fourth quarter. The coffee giant reported declines across key metrics, including same-store sales, net revenue, and profits, as it faced weakening demand in the US market.

For Q4 2024, Starbucks saw global comparable store sales drop by 7%, with consolidated net revenues slipping 3% to $9.1 billion. The earnings per share fell by 24%, landing at $0.80 on a constant currency basis.

In the US, comparable sales declined by 6%, driven by a significant 10% drop in transaction volume, although this was slightly offset by a 4% increase in average ticket size. In China, Starbucks experienced an even sharper downturn, with sales plunging 14% for the quarter.

In response to these results, the company suspended its guidance for the upcoming fiscal year as new CEO Brian Niccol focuses on steering the business through declining demand for its premium offerings. Starbucks is now entering a period of recalibration to address the challenges posed by slowing sales and evolving consumer preferences.

Starbucks Corporation (NASDAQ:SBUX) - A Resilient Investment in the Coffee Industry

  • Starbucks' stock has experienced a slight dip of 1.53% over the past 10 days but shows signs of a strong rebound with a monthly gain of 2.83%.
  • The company has a projected stock price increase of 15.53%, with a target price set at $110.89, highlighting its growth potential.
  • Starbucks boasts a strong Piotroski Score of 8, indicating solid financial health and operational efficiency.

Starbucks Corporation (NASDAQ:SBUX) is a global coffeehouse chain known for its premium coffee and customer-centric approach. Founded in 1971, Starbucks has grown to become a leading player in the coffee industry, with thousands of locations worldwide. The company competes with other major coffee brands like Dunkin' and McDonald's, but it distinguishes itself through its unique store experience and diverse product offerings.

Despite a slight dip of 1.53% over the past 10 days, Starbucks' stock has shown resilience, indicating potential for a strong rebound. This minor setback could be an opportunity for investors to buy shares at a lower price, especially given the stock's respectable monthly gain of 2.83%. This gain suggests that investors remain confident in Starbucks' market strength and future prospects.

Starbucks' growth potential is underscored by a projected stock price increase of 15.53%. This growth is driven by the company's strategic initiatives to expand its market presence and improve operational efficiency. With a target price set at $110.89, analysts express confidence in Starbucks' ability to overcome challenges and seize growth opportunities, making it an attractive investment option.

The company's financial health is reflected in its strong Piotroski Score of 8. This score indicates solid profitability, liquidity, and operational efficiency, which are key factors for value investors. Starbucks' robust financial position supports its growth strategies and enhances its appeal as a resilient investment choice in the competitive coffee industry.

Starbucks Corporation (NASDAQ:SBUX) Price Target and Market Performance

  • Citigroup sets a price target of $99 for Starbucks, indicating a potential increase of approximately 3.03%.
  • Starbucks' current stock price is $96.09, with a trading day fluctuation between $95.36 and $96.51.
  • The company maintains a robust market capitalization of approximately $108.9 billion, showcasing its strong market position.

Starbucks Corporation, listed on the NASDAQ:SBUX, is a global coffeehouse chain known for its premium coffee and diverse menu offerings. With a strong presence worldwide, Starbucks competes with other major coffee brands like Dunkin' and McDonald's. On October 7, 2024, Jon Tower from Citigroup set a price target of $99 for Starbucks, while the stock was trading at $96.09.

The price target set by Citigroup suggests a potential increase of approximately 3.03% from the current stock price. This target aligns with the favorable ratings from Wall Street analysts, who recommend Starbucks as a buy. Such endorsements can influence investor decisions and potentially drive the stock price closer to the target.

Currently, Starbucks' stock price is $96.09, reflecting a slight decrease of $0.49, or about -0.51%. Throughout the trading day, the stock has seen fluctuations, with a low of $95.36 and a high of $96.51. This volatility is typical in the stock market and can be influenced by various factors, including analyst recommendations.

Over the past year, Starbucks' stock has experienced significant highs and lows, reaching a peak of $107.66 and a low of $71.55. Despite these fluctuations, the company maintains a robust market capitalization of approximately $108.9 billion, indicating its strong position in the market.

The trading volume for Starbucks is 6,662,338 shares, reflecting active investor interest. As highlighted by Zacks, the positive analyst ratings and the set price target may continue to attract investors, potentially impacting the stock's future performance.