Market Overview

Strong Q1 Results From Starbucks Can't Outweigh Soft Outlook


Investors are selling shares of Starbucks Corporation (NASDAQ: SBUX) in Thursday's after-hours trading session.

The market is reacting to quarterly results, which were better than Wall Street analysts had been expecting, but guidance was light.

The company, in a press release issued shortly after the closing bell, said "strong" holiday performance drove an 8 percent increase in global same-store sales. Total sales rose about 12 percent on a year-over-year basis to about $5.374 billion.

First-quarter net income came in at a record $1.1 billion, up about 16 percent from the same quarter last year. Pro-forma earnings totaled $0.46 per share, up 15 percent from last year.

Analysts had been expecting total revenue of $5.39 billion and earnings of $0.45 per share.

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Chairman and CEO Howard Schultz said the results "underscore the accelerating strength and relevance of the Starbucks brand around the world. Successful retail, CPG, digital, mobile, loyalty, card and investment strategies are combining to accelerate our revenue growth and drive significant margin expansion and EPS leverage."

Starbucks said second-quarter adjusted earnings are expected to be in the range of $0.38 to $0.39, compared to an analyst estimate of $0.40.

For the fiscal year 2016, the company is forecasting non-GAAP earnings of $1.87 to $1.89 per share, versus the Street estimate of $1.89.

Shares of Starbucks last traded at $56.65, down more than 4 percent from Thursday's closing price.


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