Starbucks Q3 Earnings Beat Expectations, Shares Gain

Shares of Starbucks Corporation SBUX jumped more than 2 percent in after-hours trading after the company reported better-than-expected results for its fiscal third quarter. The Seattle, Washington-based company posted quarterly net income of $626.7 million, or $0.41 per share, compared to $512.6 million, or $0.34 per share, in the year-ago period. Non-GAAP earnings climbed 24 percent to $0.42 per share. Its net revenue surged 18 percent year-over-year to $4.9 billion. However, analysts were expecting earnings of $0.41 per share on revenue of $4.86 billion. The average estimate among 88 Estimize users was for earnings of $0.42 per share and revenue of $4.87 billion. Its global comparable store sales rose 7 percent in the quarter, while traffic increased 4 percent. Americas comparable store sales gained 8 percent, while China/Asia Pacific comparable store sales climbed 11 percent. EMEA comparable store sales rose 3 percent in the quarter. Its operating income rose 22 percent to $938.6 million, while operating margin widened 70 basis points to 19.2 percent for the quarter. During the quarter, its comparable store customer transactions climbed around 18 million year-over-year in the U.S. and over 23 million globally. During the quarter, Starbucks opened 431 net new stores. Starbucks also reported an additional 50 million share buyback authorization. "Starbucks very strong year over year financial performance in Q3 demonstrates our commitment to delivering best in class financial and operating results while at the same time investing in our future growth - building new stores, renovating existing stores, deploying new technology - investing in our partners and delivering an elevated Starbucks Experience to our customers," said Scott Maw, Starbucks CFO. "We believe that by getting this balance right, we will be able to continue delivering exceptional growth, profitability and increased returns to our shareholders." The company now projects Q4 GAAP earnings of $0.38 to $0.39 per share and full-year GAAP earnings of $1.77 to $1.78 per share. It expects Q4 non-GAAP earnings of $0.42 to $0.43 per share and full-year non-GAAP earnings of $1.57 to $1.58 per share. Starbucks shares gained 2.63 percent to $58.05 in the after-hours trading session.