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Starbucks (SBUX) to Post Q3 Earnings: What to Expect?
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Starbucks Corporation (SBUX - Free Report) is scheduled to report its third-quarter fiscal 2022 results on Aug 2, after the closing bell. In the last reported quarter, the company delivered an earnings miss of 1.7%.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 77 cents per share, indicating a decline of 23.8% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues stands at $8.21 billion, suggesting growth of 9.5% from the year-ago quarter.
Factors to Note
The company’s fiscal third-quarter top line is likely to have benefited from comps growth and digitalization. An increase in transaction and average ticket growth might have favored comps growth in the quarter to be reported. The company has been gaining from an increase in 90-day active Starbucks Rewards members. The company continues to gain from strong expansion efforts.
Robust North America segment sales are likely to have driven the company’s top line. The Zacks Consensus Estimate for revenues for North America and International segments is pegged at $6,141 million and $1,695 million, suggesting a year-over-year improvement of 13.7% and 2.2%, respectively.
However, dismal performance in China is likely to have negatively impacted the company’s results. During the second-quarter conference call, the company said that due to uncertainty in China, it is unable to predict its performance in the country during the back half of the year. Due to the Shanghai lockdown and resurgence of the virus in other cities, the company expects its China performance to worsen in third-quarter 2022. At the end of second-quarter 2022, the company noted that nearly one-third of its stores in China remain temporarily closed or are offering mobile ordering channels only.
Inflationary pressures and increased investments in store partner wages and benefits are likely to have hurt the margin in the quarter-to-be reported. We expect the adjusted operating margin in third-quarter 2022 to be 19.9% compared with 20.5% reported in the prior-year quarter.
Our proven model doesn’t conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Starbucks has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of -0.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3 (Hold).
Stocks Poised to Beat Estimates
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season:
Shares of Wendy's have declined 8.8% in the past year. WEN’s earnings surpassed the consensus mark in three out of four quarters and missed once, the average being 14.2%.
Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +2.46% and a Zacks Rank #1. The company is likely to register bottom-line improvement when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.78 suggests an improvement of 4.8% from the year-ago quarter.
Ulta Beauty's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $2.18 billion, which indicates an improvement of 10.8% from the figure reported in the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.
The Children's PlacePLCE currently has an Earnings ESP of +1.03% and a Zacks Rank #3. The company is likely to register a decline in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 97 cents suggests a decline from $1.71 reported in the year-ago quarter.
The Children's Place’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $395.6 million, which indicates a decline of 4.4% from the figure reported in the prior-year quarter. PLCE has a trailing four-quarter earnings surprise of 58%, on average.
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Starbucks (SBUX) to Post Q3 Earnings: What to Expect?
Starbucks Corporation (SBUX - Free Report) is scheduled to report its third-quarter fiscal 2022 results on Aug 2, after the closing bell. In the last reported quarter, the company delivered an earnings miss of 1.7%.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 77 cents per share, indicating a decline of 23.8% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues stands at $8.21 billion, suggesting growth of 9.5% from the year-ago quarter.
Factors to Note
The company’s fiscal third-quarter top line is likely to have benefited from comps growth and digitalization. An increase in transaction and average ticket growth might have favored comps growth in the quarter to be reported. The company has been gaining from an increase in 90-day active Starbucks Rewards members. The company continues to gain from strong expansion efforts.
Robust North America segment sales are likely to have driven the company’s top line. The Zacks Consensus Estimate for revenues for North America and International segments is pegged at $6,141 million and $1,695 million, suggesting a year-over-year improvement of 13.7% and 2.2%, respectively.
However, dismal performance in China is likely to have negatively impacted the company’s results. During the second-quarter conference call, the company said that due to uncertainty in China, it is unable to predict its performance in the country during the back half of the year. Due to the Shanghai lockdown and resurgence of the virus in other cities, the company expects its China performance to worsen in third-quarter 2022. At the end of second-quarter 2022, the company noted that nearly one-third of its stores in China remain temporarily closed or are offering mobile ordering channels only.
Inflationary pressures and increased investments in store partner wages and benefits are likely to have hurt the margin in the quarter-to-be reported. We expect the adjusted operating margin in third-quarter 2022 to be 19.9% compared with 20.5% reported in the prior-year quarter.
Starbucks Corporation Price and EPS Surprise
Starbucks Corporation price-eps-surprise | Starbucks Corporation Quote
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Starbucks has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of -0.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3 (Hold).
Stocks Poised to Beat Estimates
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season:
The Wendy's Company (WEN - Free Report) has an Earnings ESP of +0.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Wendy's have declined 8.8% in the past year. WEN’s earnings surpassed the consensus mark in three out of four quarters and missed once, the average being 14.2%.
Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +2.46% and a Zacks Rank #1. The company is likely to register bottom-line improvement when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.78 suggests an improvement of 4.8% from the year-ago quarter.
Ulta Beauty's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $2.18 billion, which indicates an improvement of 10.8% from the figure reported in the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.
The Children's Place PLCE currently has an Earnings ESP of +1.03% and a Zacks Rank #3. The company is likely to register a decline in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 97 cents suggests a decline from $1.71 reported in the year-ago quarter.
The Children's Place’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $395.6 million, which indicates a decline of 4.4% from the figure reported in the prior-year quarter. PLCE has a trailing four-quarter earnings surprise of 58%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.