Starbucks Corporation (NASDAQ:SBUX) stock fell 8.69% (As on May 3, 11:48:26 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 23. Global comparable store sales increased 11% year over year. The upside was primarily driven by a 4% rise in average tickets and 6% rise in comparable transactions. In the fiscal second quarter, Starbucks opened 464 net new stores worldwide, bringing the total store count to 36,634. On a non-GAAP basis, the operating margin was 14.3%, up from 13% reported in the prior-year quarter. The upturn was mainly driven by sales leverage, pricing, productivity improvement and gain on the sale of Seattle’s Best Coffee brand. The margin gain was marginally overshadowed by investments in labor and inflationary pressures.

SBUX in the second quarter of FY 23 has reported the adjusted earnings per share of 74 cents, beating the analysts’ estimates for the adjusted earnings per share of 64 cents, according to the Zacks Consensus Estimate. The company had reported 14.2 percent rise in the adjusted revenue to $8.72 billion in the second quarter of FY 23, missing the analysts’ estimates for revenue of $8.40 billion. The company ended fiscal second quarter with cash and cash equivalents of $3,0716.8 million compared with $2,818.4 million as of Oct 2, 2022. As of Apr 2, long-term debt totaled $13,544.8 million compared with $13,119.9 million as of Oct 2, 2022.

Moreover, net revenues of North America were $6,380.6 million, up 17% year over year. The segment benefited from 12% growth in company-operated comparable store sales and new store growth. Average ticket and transaction increased 5% and 6%, respectively. Net revenues of International were $1,854.8 million, up 9% year over year. A 7% gain in comparable store sales, 10% growth in net new store and improvement in its licensed store revenues primarily resulted in the uptick. However, this was marginally offset by nearly 10% unfavorable impact from foreign currency translation. In the fiscal second quarter, comps in China rose 3% year over year (against the 23% fall reported in the prior-year quarter). The increase was caused by a 4% rise in transactions. However, in average tickets it declined 1%.

SBUX reiterated its fiscal 2023 guidance. It anticipates global comparable sales to reach the high end of the 7-9% target. Margin improvement is expected on a sequential basis in third and fourth-quarter fiscal 2023. The company anticipates earnings per share to increase sequentially in third and fourth-quarter fiscal 2023. However, third-quarter fiscal 2023 EPS is likely to be well below SBUX’s yearly guided range of 15-20%.