Coffee chain stock to watch: Starbucks Corporation (NASDAQ: SBUX)

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Starbucks Corporation (NASDAQ: SBUX) stock rose over 0.96% on 31st October, 2019 (As of  10:07 am GMT-4; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. In the fourth quarter of fiscal 2019, the company has realigned its operating segment reporting structure for better reflecting the cumulative effect of its streamlining efforts. The previous China/Asia Pacific (CAP) segment and Europe, Middle East, and Africa (EMEA) segment have been combined into one International segment.

SBUX in the fourth quarter of FY 19 has reported the adjusted earnings per share of 70 cents, which is in line with the analysts’ estimates for the adjusted earnings per share of 70 cents, according to Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 10 percent to $6.75 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 1.14%. Non-GAAP operating margin has declined 90 basis points to 17.2% compared to the prior year. The company had adjusted unfavorable impacts of approximately 3% from Streamline-driven activities. Streamline-driven activities comprised of the licensing of the CPG and Foodservice businesses to Nestlé after the close of the transaction on August 26, 2018, and the conversion of certain international retail operations from company-operated to licensed models

There has been 5% rise in the Global comparable store sales on the back of 3% increase in average ticket and a 2% increase in comparable transactions. In Americas and U.S., the comparable store sales have grown by 6%, both due to the 3% increase in average ticket and a 3% increase in comparable transactions. For International, the comparable store sales has grown 3%, due to 3% increase in average ticket and a 1% rise in transactions and in China, the comparable store sales have risen 5%, with comparable transactions up 2%. During the fourth quarter, Starbucks Rewards loyalty program grew 15% to 17.6 million active members in the U.S.year-over-year

The company opened 630 net new stores in the fourth quarter, which led to the total of 31,256 stores at the end of the quarter, a 7% increase over the prior year.

During the fourth quarter, the company had returned $2.7 billion to shareholders through a combination of share repurchases and dividends. The company has declared a cash dividend of $0.41 per share, an increase of 14%, payable on November 29, 2019, to shareholders of record as of November 13, 2019. The company had repurchased 23.5 million shares of common stock in the fourth quarter fiscal 2019 and approximately 29.2 million shares remain available for purchase under the current authorization

For fiscal 2020, the company expects global comparable store sales growth to be in the range of 3% to 4%, approximately 2,000 net new Starbucks stores to be opened globally, Non-GAAP EPS to be in the range of $3.00 to $3.05 and capital expenditures to be of approximately $1.8 billion.

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