Starbucks Corporation | $SBUX Stock | Shares Buck Lower On Q1 Revenues Miss


Starbucks Corporation (NASDAQ: SBUX)


On Thursday January 25th, 2017, Starbucks Corporation reported quarterly earnings after the market closed. The earnings were stellar in the realm of performance. However, when you analyze them compared to what analysts have been expecting or what the whisper numbers were, then Starbucks slightly disappointed.

Subsequently, shares got blasted in the after market trading session as they fell precipitously. Let’s start by saying that the company reported $0.65 per share which beat the average analyst at $0.57 per share estimate. Revenues, which was the soft spot, came in at$6 billion dollars, which just missed estimates of 6.14 billion dollars.

This revenue figure grew by over 6% from the year prior. So as you can see, Wall Street is punishing companies that not only don’t meet expectations but even when they beat expectations the shares are vulnerable. The one silver lining is that the company does pay a hefty 1.95% dividend annually.

This alone is attractive for many longer-term investors so there should be some type of support for the share price even though the market will probably be lower for their shares in the morning.

Shares closed the regular trading session at $60.55 which was down $0.28 on the day. However in the aftermarket session shares dropped by 4.31% closing at $57.94.

Company Comments

Scott Maw, CFO had this to say after the earnings came out,

“Starbucks delivered solid revenue and profit growth and our first ever $6 billion revenue quarter in Q1. We are laser-focused on accelerating growth in China and driving improvement across the as we move into and through the back half of the year, and remain committed to delivering on the long-term targets we announced last quarter.”

SBUX Technicals

The above chart shows the regular trading session on the left, and the after hours session on the right. You can clearly see that when the earnings were announced shares dropped initially precipitously, then formed a sideways base and then dropped again.

The chart above shows the daily price action going back a number of months. You can see how Starbucks had been in a decent up trend, but now it seems as though that uptrend will be penetrated as shares will  likely open in the red oval area in the far right corner.

Company Profile

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development.

Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, and food and snacks; and various food products, such as pastries, breakfast sandwiches, and lunch items.

The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. It offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, premium Tazo, and Starbucks VIA brand names.

As of November 2, 2017, the company operated 27,339 stores across 75 countries. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.-YahooFinance