Starbucks Earnings Mixed, Raises 2014 Guidance - Analyst Blog

Starbucks Earnings Mixed, Raises 2014 Guidance

Starbucks SBUX reported Q2 2014 earnings after the bell today, posting an EPS of $0.56, and Revenues of $3.87 billion.  The EPS number was in-line with the Zacks Consensus Estimate, but the Revenues lagged the Zacks Consensus Revenue Estimate of $3.97 billion.  

The major concern on the street was two-fold today; first, the bottom line, and the second being Same Store Sales.  The inline earnings numbers were a positive, because the street was concerned that the terrible weather, and commodity costs might have negatively impacted the bottom line.  Same Store Sales also came in line with 6% growth, matching Zack's expectations.  

There was plenty of positive news to come out of the earnings announcement.  First, was that there was margin expansion across all segments for Q2 2014.  Second, the company saw an 18% increase in operating income.  And finally, but most importantly, management adjusted their guidance numbers for the fourth quarter, and fiscal year 2014.  There was a narrow rise in Fiscal Year 2014 EPS, it now stands between $2.62 and $2.68 (from $2.59 to $2.67).  The company kept their guidance for Q3 at $0.64 to $0.66, but they did raise Q4 to $0.71 to $0.75, from $0.70 to $0.75.  This only highlights the fact that Starbucks is looking towards the second half of the year for growth.  

There was no mention of Starbuck's potential 10% equity stake in SodaStream, but management is expected to cover the topic during their conference call later tonight.

In afterhours trading, SBUX is up just under 1% on mild volume.  Tomorrow, Zacks will post a fully detailed earnings report coving items in the conference call.