Beverage Stock to Watch: Starbucks Corporation (NASDAQ: SBUX)

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Starbucks Corporation (NASDAQ: SBUX) stock fell over 1.6% on April 28th, 2021 in the pre-market session (Source: Google finance) after the company posted mixed results for the second quarter of FY 21. The company has opened 5 net new stores in the second quarter of fiscal 2021, yielding 3% year-over-year unit growth, ending the period with 32,943 stores globally. During the second quarter, global comparable store sales increased 15%, on the back of a 19% increase in average ticket, partially offset by a 4% decline in comparable transactions.

Starbucks Coffee

SBUX in the second quarter of FY 21 has reported the adjusted earnings per share of 62 cents, beating the analysts’ estimates for the adjusted earnings per share of 52 cents. The company had reported the adjusted revenue growth of 11 percent to $6.67 billion in the second quarter of FY 21, missing the analysts’ estimates for revenue of $6.8 billion. This is mainly driven by a 15% growth in comparable store sales. The company delivered Non-GAAP operating margin of 16.1%, up from 9.2% in the prior year

Starbucks expects full-year 2021 earnings to be in the range of $2.90 to $3 per share, with revenue expected to be in the range of $28.5 billion to $29.3 billion. 2021 Consolidated non-GAAP operating margin is expected to be in the range of 16.5% to 17.5%. For fiscal 2021, the company expects Global comparable store sales growth to be in the range of 18% to 23%, Americas and U.S. comparable store sales growth is expected to be in the range of 17% to 22%, International comparable store sales growth is expected to be in the range of 25% to 30% and China comparable store sales growth is expected to be in the range of 27% to 32%. In 2021, the company projects approximately 2,150 new store openings and 1,100 net new Starbucks stores globally, Americas approximately 850 new store openings and approximately 50 net new stores, International approximately 1,300 new store openings and 1,050 net new stores and approximately 600 net new stores in China. 2021 Channel Development revenue is expected to be in the range of $1.4 billion to $1.6 billion, Interest expense is expected to be in the range of approximately $470 million to $480 million and capital expenditures to be of approximately $1.9 billion

Additionally, the company has declared a cash dividend of $0.45 per share, payable on May 28, 2021, to shareholders of record as of May 13, 2021.

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