Starbucks misses by $0.12, misses on revs; US comps -3%; global comps -4%; will guide on conference call at 17:00 ET (88.49 +0.16)
- Reports Q2 (Mar) earnings of $0.68 per share, excluding non-recurring items, $0.12 worse than the FactSet Consensus of $0.80; revenues fell 1.8% year/year to $8.56 bln vs the $9.12 bln FactSet Consensus.
- Global comparable store sales declined 4%, driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average ticket. North America and U.S. comparable store sales declined 3%, driven by a 7% decline in comparable transactions, partially offset by a 4% increase in average ticket. International comparable store sales declined 6%, driven by a 3% decline in both comparable transactions and average ticket; China comparable store sales declined 11%, driven by an 8% decline in average ticket and a 4% decline in comparable transactions. The company opened 364 net new stores in Q2, ending the period with 38,951 stores: 52% company-operated and 48% licensed. At the end of Q2, stores in the U.S. and China comprised 61% of the company's global portfolio, with 16,600 and 7,093 stores in the U.S. and China, respectively.
- GAAP operating margin contracted 240 basis points year-over-year to 12.8%, primarily driven by deleverage, incremental investments in store partner wages and benefits, increased promotional activities, lapping the gain on the sale of Seattle's Best Coffee brand, as well as higher general and administrative costs primarily in support of Reinvention. This decline was partially offset by pricing and in-store operational efficiencies.
- "While it was a difficult quarter, we learned from our own underperformance and sharpened our focus with a comprehensive roadmap of well thought out actions making the path forward clear," commented Rachel Ruggeri, chief financial officer. "On this path, we remain committed to our disciplined approach to capital allocation as we navigate this complex and dynamic environment," Ruggeri added.
- Company typically guides on conference call at 17:00 ET.