Starbucks Q4 Revenue Fell Short Of Expectations, Shares Slid

Starbucks Q4 Revenue Fell Short Of Expectations, Shares Slid

Starbucks shares fell 6% in premarket trading on Friday after the Seattle based coffee chain missed revenue and same-store sales estimates in its fiscal fourth quarter and shared a mixed outlook for the coming fiscal year.

The coffeehouse chain attracted a revenue of $8.1 billion compared to $8.22 billion as per Wall Street estimates based on a survey of analysts by Refinitiv.  

Consolidated net revenues of $8.1 billion were up 31% compared to the prior-year periods, mainly due to an increase of 17% that it saw in comparable-store sales, lapping from the unfavourable impact of the COVID-19 pandemic on its business in 2020.

Adj. earnings per share (EPS) came in at $1.00 above the expectations of $0.99. 

North America comparable store sales rose to 22% but below the Wall Street expectations of 24.13%. The increase was primarily driven by an 18% increase in comparable transactions and a 3% growth in average tickets.

International comparable store sales saw a growth of 3% but missed the forecast of 4.3%. The sales growth was mainly due to a 6% increase in comparable transactions, partially offset by a decrease of 2% in average tickets.

China comparable store sales saw a decline of 7% as there was a 5% decline in average ticket and a 2% decline in transactions.

In the release, Starbucks highlighted that it opened 538 net new stores in the reporting quarter, yielding 4% YOY unit growth, taking the tally to 33,833 stores globally, of which 51% and 49% were company-operated and licensed, respectively.

The U.S. and China stores comprised 62% of the company’s global portfolio at the end of the last quarter of the fiscal, with 15,450 and 5,360 stores, respectively.

Earnings per share of $1.49 rose from $0.33 in the previous year, counting a $0.56 gain on the sale of its South Korea joint venture and $0.10 in regards to the extra week in Q4 fiscal 2021.

Starbucks net income for the reporting quarter was $1.76 billion, or $1.49 per share, up from $392.6 million, or 33 cents per share reported in the year-ago period.

Company’ Rewards loyalty program 90-day active members in the U.S. grew to 24.8 million, up 28% YOY. 

Starbucks - Stock Activity on Quantale.io

On the dashboard of Quantale, the social engagement for the stock, on Thursday, amongst the users of Twitter and Reddit surged more than 450% combined with an increase of nearly 30 % in the trading volume.  

A total of 7.39 million shares of the stock exchanged hands, 2.02 million above the average of 5.37 million. 

Market Cap of Starbucks as of 28 October 2021 was $123.65B. 

On Friday, the NASDAQ-listed stock opened at $107.50, down $5.7 apiece.

However, the company posted strong figures in its full-year fiscal 2021 results, with global comparable sales increasing 20%, primarily due to a 9% rise in transactions and a 10% growth in the average ticket.

“Our strong finish to fiscal 2021, including record performance in the fourth quarter, demonstrates the resilience of Starbucks and reinforces the value of the bold strategic moves we have taken over the past two years,” Starbucks President and CEO Kevin Johnson said in the release.

Consolidated net revenues for the full year 2021 was $29.1 billion, an increase of 24% (21% on a 52-week basis) from the prior year. 

For the coming fiscal, the coffee chain is expecting its GAAP earnings per share to contract by 4% and adjusted earnings per share to increase by at least 10%. 

For the fiscal year 2022, Starbucks is expecting consolidated revenue to range between $32.5 billion and $33 billion. 

Starbucks expects worldwide same-store growth in the mid-single digits and net sales to come in the range between $32.5 billion to $33 billion, which is ahead of Wall Street’s expectations of $32.07 billion forecast. The firm plans to expand its worldwide network by around 2,000 net new cafés, up significantly from 1,173 in fiscal 2021. 

“Fiscal 2022 will be a pivotal year of investment, marked by an increase in wage investments to further support our store partners in this critical moment, helping to ensure we have, one, the very best talent to drive our business forward and, two, the ability to continue capturing and maintaining meaningful category share gains, said Rachel Ruggeri — Vice President and Chief Financial Officer in the earnings call conference with analysts.