Starbucks Corporation (NASDAQ:SBUX) is slated to unveil its first-quarter fiscal 2024 financial results on January 30, after the market closes. In the previous quarter, the company surpassed earnings expectations with a margin of 9.3%.
Q1 Projections
The Consensus Estimate for earnings stands at 93 cents per share, reflecting a 24% increase from the corresponding period last year. Over the past 7 days, earnings estimates have seen a marginal downward adjustment of 1%. Meanwhile, the Consensus Estimate for revenues is set at $9.6 billion, indicating a 10.1% rise from the prior year.
Key Considerations
The upcoming quarter’s results for SBUX are expected to benefit from significant improvements in China, the opening of new stores, enhanced product offerings, and streamlined supply-chain operations. The sustained focus on a robust loyalty program is anticipated to contribute positively.
Strong growth in comparable sales is likely to have bolstered the top line during the reported quarter. Our model predicts a surge of 8% in both North America and International comparable sales growth compared to the same period last year.
For the first quarter of fiscal 2024, our projections indicate North America and International sales to reach $7,014.3 million and $2,207 million, representing increases of 7.1% and 31.4% from the actual figures a year ago, respectively. Starbucks has benefited from increased transactions and average ticket growth. However, we anticipate a slight decline of 0.1% in Channel Development sales to $477.6 million compared to the prior year.
The ongoing inflationary pressure is expected to have a dampening effect on the bottom line, as ingredient costs have experienced a notable increase in recent quarters. Our model suggests total operating expenses to amount to $5,138.4 million, indicating a 9.1% improvement from the same quarter in the previous year.
Nevertheless, the company’s margin is likely to be positively influenced by sales leverage, pricing strategies, and productivity enhancements during the reviewed quarter.
Featured Image: Unsplash @ June Andrei George
Author Stephanie Bédard-Châteauneuf 
