Starbucks (SBUX) is expected to post its fiscal third-quarter results on Tuesday after market close.
Wall Street expects the Seattle-based coffee giant to get a boost from consumers returning to the office, increased speed of service from its reinvention plan ( announced at its biannual investor day last September ), improvements in China as it recovers from COVID-19 lockdowns, among other drivers.
Adjusted earnings per share are expected to come in at $0.95 and revenue of $9.3 billion, according to Bloomberg consensus estimates.Same-store sales are also expected to increase, 11.12%, driven by international growth, 24.5%, with China specifically, up an extraordinary 41.8%.
Here in North America, sales are still expected to be higher, up 8.2%, and in the U.S., up 7.7%.
This will be Laxman Narasimhan’s second earnings report since he took the helm from Howard Schultz on March 23, following a nearly six month immersion experience at the company.
Since he joined, shares are up 3% as of Friday, July 28.
On an international basis, analysts expect transactions be up, 23% with a 8% increase in in the average ticket.
In North America, transactions are expected to come in up 3%, compared to last quarter’s 6% increase year-over-year.A similar expectation for ticket size, up 4.2% in Q3, compared to a 6% increase in Q2.
In a note to clients from Nick Seytan of Wedbush said he expects “increased traffic due to return-to-office trends and improvements in speed of service, a sales lift from food sales, and continued strength in delivery and mobile orders” to be positive call-outs this quarter.Webush has a neutral rating on shares of Starbucks.
Per Placer.ai , foot traffic in Q2 was up 6.9% year-over-year at Starbucks, higher than its competitors Tim Hortons ( QSR ), up 6.5%, and Dunkin, up 3.6%.
SHANGHAI, CHINA – JULY 15, 2023 – Customers rest in a Starbucks Reserve in Shanghai, China, July 15, 2023.
(Photo credit should read CFOTO/Future Publishing via Getty Images) Despite higher prices, consumers don’t seem to be changing their habits, per Sharon Zackfia of William Blair, which has an Outperform rating on the stock.
Story continues “As of an investor meeting we hosted in early June, management indicated no sign of a softening macro environment impacting the company’s U.S.business or any change in domestic consumer behavior,” she said in a note to clients.
In last quarter’s results, Starbucks didn’t share how much it raised menu prices year-over-year, but as of Q4 2022, Starbucks raised menu prices by 5% over a 12-month period.
In an interview following last quarter’s results.Starbucks, CFO Rachel Ruggeri told Yahoo Finance prices are expected to moderate.
“We would expect that [changes in price will] to start to moderate in the back half of the year, as we get to more historical levels of pricing, which we’ve shared is typically around 1% to 2%,” she said.
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Brooke DiPalma is a reporter for Yahoo Finance.Follow her on Twitter at @ BrookeDiPalma or email her at [email protected].
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