Retail
Starbucks Valuation Catching Up To Share Price After Earnings (SBUX, GMCR)
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Starbucks Corporation (NASDAQ: SBUX) is out with earnings. Some of the highlights are a record 11% earnings per share gain to $0.50 EPS on a 16% gain in sales to $3.435 billion; Thomson Reuters had estimates of $0.49 EPS and $3.29 billion in sales. Operating margin on a year over year basis was down about 80 basis points to 16.2%.
For 2012 the company “has raised its expectation for earnings per share to a range of $1.78 to $1.82 representing 17% to 20% growth over the $1.52 EPS in FY11, excluding the non-routine gains. EPS growth is expected to be approximately 10% in the first half of FY12 and approximately 25% in the second half of FY12.”
Starbucks noted that it “continues to target 10% revenue growth on mid-single digit comparable store sales growth. The company is also maintaining that it will have 50 to 100 basis points margin improvement over fiscal 2011.
The coffee giant reported also that its global comparable store sales rose by roughly 9%, after a 7% traffic rise and a 2% higher sales price gain.
Another note is that Starbucks opened 241 net new stores globally. The company now has 500 stores in both mainland China and Latin America. For 2012, the company is targeting 400 new stores in the Americas, 300 stores in Asia/Pacific, and 100 stores in the EMEA regions.
As far as the deal with Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR), the Starbucks report said that more than 100 million Starbucks- and Tazo-branded K-Cup packs shipped in the first quarter after the November 1 launch date.
Some investors may be puzzled that the stock is not higher. Frankly, it is holding up fine (all things considered) as the valuation has to catch up to its share price. Shares rose 1.2% today to $48.34 and it hit an all-time high of $48.49. Shares are now down 1.2% at $47.80 in the after-hours session.
As we noted earlier, this is close to analyst consensus targets and it trades at 26-times this year’s expected earnings now.
JON C. OGG
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