Channel Checks Indicate Starbucks Saw 4% Comps Growth In U.S. During Q1

Starbucks Corporation SBUX could generate “consistent mid-to-high teens annual EPS growth,” given expectations of Americas comp momentum, accelerating China and Asia Pacific Region unit growth, a successful Europe, the Middle East and Africa turnaround and multiple consumer packaged goods and emerging market opportunities, Wedbush’s Nick Setyan said in a report.

Setyan reiterated an Outperform rating on Starbucks, with a price target of $65. He added that channel checks had indicated ~4 percent U.S. comps in FQ1.

U.S. Comps

“Our recent checks of 5 percent of U.S. co-owned locations imply a FQ1 comp of ~4 percent in U.S., approximately in-line with 4 percent Americas consensus. Mobile order and pay, remodels and drive-thru additions, beverage innovation and seasonal LTOs, and food continue to be cited as drivers, while cannibalization remains the primary reason for a decline in sales,” Setyan wrote.

The analyst expressed optimism regarding sustained momentum in Americas comp growth, citing continued benefit from the company’s differentiated food offerings, attractive beverage limited-time offers, mobile ordering, throughput and loyalty and mobile adoption initiatives.

Starbucks has guided to non-GAAP EPS of $2.12–$2.14 on mid-single-digit comp growth for FY 2017.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasNewsReiterationRestaurantsAnalyst RatingsMoversTrading IdeasGeneralNick SetyanWedbush
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!