Starbucks Earnings: What To Expect?

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Starbucks Corporation (NASDAQ:SBUX) is scheduled to report its third quarter financial performance for the current fiscal year on Thursday, July 25. Analysts believe the global coffee chain will post strong earnings results for the quarter.

Starbucks enjoying strong earnings

Over the past three months, the stock price of Starbucks Corporation (NASDAQ:SBUX) increased by 20% as the company continues to enjoy strong earnings and due to the improvement of the economy in the United States.

The existing low price of coffee—particularly Arabica coffee, which has been trading low for more than three years—is beneficial for Starbucks’s bottom line, and it also helps drive the stock price of the company.

Starbucks Corporation (NASDAQ:SBUX)’s business operations in America continues to gain momentum with 6% sales growth in the previous quarter. Starbucks’ 2Q revenue in the Americas was $2.6 billion, up by 10% year-over-year. The company has more than 10,000 stores in the United States. The company is growing steadily in China and the Asia Pacific. The company recorded an 8% growth with $213 million revenue last quarter, an increase of 22% year-over-year in the region. Starbucks plans to open 1,500 stores in China by the end of 2015.

During the previous quarter, Starbucks Corporation (NASDAQ:SBUX) reported that its Stabucks coffee K-cup packs were recognized as the most successful CPG beverage product of 2012 by Information Resources Inc, one of the leading market research firms. Last year, the company reported $1.3 billion revenue from its packaged products, which is starting to contribute a significant amount to its financial results. Analysts believe that the segment will remain strong and will expand internationally.

Starbucks expectations

For the full fiscal 2013, management of Starbucks Corporation (NASDAQ:SBUX) wants to achieve a revenue growth rate of 10% to 13%. The company is also targeting mid-single digit comparable store sales for its global operations. Management estimates that Starbucks’s consolidated operating margin will improve by 100 basis points, and its capital expenditures will be around $1.2 billion.

Starbucks Corporation (NASDAQ:SBUX) also raised its full year 2013 EPS estimate to around $2.12 to $2.18. For it’s the third quarter, the company expects to generate $0.50 to $0.53 earnings per share, and approximately $0.54 to $0.57 earnings per share for the fourth quarter

In addition, the company previously stated its plan to open approximately 1,650 new stores worldwide including 1,300 Starbucks stores and 350 Teavana stores. The planned store openings of the Starbucks Corporation (NASDAQ:SBUX) clearly demonstrate that its business operations and global expansion remain strong.

The consensus EPS estimate of analysts for the coffee chain is $0.53 and its revenue is expected to be around $3.72 billion for the third quarter. For the full fiscal 2013, Starbucks Corporation (NASDAQ:SBUX) is expected to achieve $2.19 EPS and $14.89 billion revenue.

Over the past 52-week range, the stock price of Starbucks Corporation (NASDAQ:SBUX) went up from $43.04 to $69.90 per share. Shares of the company are trading around $67.18 on Thursday afternoon in New York.

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