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BenzingaEditorial

Starbucks Is Back

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The so-called “reopening boom” is benefiting Starbucks (NASDAQ: SBUX) along with others from the consumer niche that were hit hard during strict social-distancing limitations over the past year. The company’s coffeehouse business is already nearly fully recovered from COVID-19 as it grew internationally with over 100% sales spike in China l while its home U.S. market grew 9% in the most recent quarter, which altogether that helped fuel profitability growth back to double digits.

Starbucks is seeing enthusiastic demand for premium products, including cold brews, refresher drinks, and breakfast sandwiches, along with booming digital sales.

No more masks for fully vaccinated customers

Along with Starbucks, Chipotle Mexican Grill (NYSE: CMG), CVS Health Corporation (NYSE: CVS), Target Corporation (NYSE: TGT), Walmart (NYSE: WMT) and Costco (NASDAQ: COST) will no longer require impose mask wearing inside their stores to fully vaccinated customers. The policy changes come after the Centers for Disease Control and Prevention updated its guidance on mask wearing on May 13th, specifying that fully vaccinated people don’t need to wear face masks indoors. Although there will be many instances where law will require even those who received the second vaccine dose two or more weeks ago to wear masks, ordering or enjoying your favorite coffee beverage at Starbucks won’t be one of those instances.

Mixed latest earnings report

Fiscal second-quarter net income amounted to $659.4 million, or 56 cents per share, pretty much doubling from $328.4 million, or 28 cents per share from the same quarter last year. Excluding items, quarterly earnings amounted to 62 cents per share, beating Wall Street estimates by 9 cents a share, despite revenue falling short of expectations due to weak international sales. Net sales rose 11% as they amounted to $6.7 billion, coming below expectations of $6.8 billion. U.S. sales have recovered to pre-pandemic levels as they rose 9% whereas global same-store sales grew by 15% as the company lapped a decline of 10% from the year-ago period.

At the same time last year, same-store sales at home fell 3% as lockdowns took place across the US. But this quarter, customers bought larger and more expensive coffees while also adding food to their orders, fueling the average up 21%. Traffic, however, is still down by 10%. Interestingly, same-store sales rose 35% outside the U.S despite many European countries extending lockdowns.

International growth is key

Starbucks’ second-largest market, China, saw same-store sales surge 91% compared to last year’s quarter when they plummeted 50% . The business in China added nearly $500 million to to the sales table which translated to a 124% spike in revenue. However, most of that spike is due to the comparison with last year, which included maximum shutdown pressures in the face of the pandemic.

 In its battle to bounce back from the effects of the coronavirus pandemic, it appears that Starbucks is now prioritizing international markets for growth the international segment now has 1,044 more stores compared to the same quarter last year.

Outlook

For the fiscal year 2021, Starbucks plans to open a net of 1,100 new locations. It will emphasize international growth by opening 1,050 of the 1,100 internationally with approximately 600 of that total will be in China which isn’t good news for Luckin Coffee Inc (OTC: LKNCY). Its international stores operate at a better profit margin at the store level, 55.2% versus 48.4% domestically. But Starbucks started this shift long before COVID-19 started its relentless march across the globe or more precisely, several years ago as it anticipated reaching saturation in the U.S. market.

As management believes customer traffic will soar as people prioritize reconnecting in person after social distancing for over a year, full-year outlook for revenue has been raised from the prior range of $28 billion to $29 billion to a range between $28.5 billion to $29.3 billion. Fiscal 2021 also includes a 53rd week, which is expected to add $500 million in revenue.

Starbucks is poised for growth

Back in April, CEO Kevin Johnson said the company has been positioned for the inevitable great human reconnection that we see unfolding in the U.S. and every market around the world and sharply improving operating trends confirm this optimistic outlook. The cashflow trend perhaps illustrates best how much stronger Starbucks has gotten compared to a year ago when COVID-19 strangled its business. As opposed to $474 million boost in the year-ago period, over the last six months, Starbucks generated $2.7 billion of operating cash. This figure implies management has plenty of resources to fund its ambitious plans for 2021 and beyond that rely on drive-through, digital ordering, and new drink and food platform launches. The coffee chain also plans to invest $1.9 billion into store remodels this year.

While the effects of the coronavirus pandemic were not devastating for Starbucks, they were definitely a headwind. Many of its popular coffee shops were closed at least temporarily for in-person seating, eliminating a lucrative source of revenue. Last year, the combined effects of the pandemic slashed operating profits by more than half YoY. But, Starbucks continued its store growth internationally as it opened five net new cafes during the quarter.

Although COVID-19 has not finished disrupting the lives of people worldwide, at least we are slowly getting some sense of normalcy we all longed for. Vaccination progress is key to predicting recovery and Starbucks is using its AI technology to predict the impact of vaccination rates on international sales growth. All in all, it seems that caffeine has kicked in and the coffee giant is now out of the woods.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

This Week’s Recap

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The market and the economy continue to open, which is probably a result of bottled-up demand for many products and services affected by the pandemic. Maybe the inflation or rising bond yields will trigger the selloff on the market at some moment, but the current Fed’s transitory inflation message has been accepted by many investors. Also, the best way to deal with inflation is to stay with your investments and keep your faith in the market. So, despite the jump of May’s consumer-price index, that did not affect the investors who adopted a different mindset, so all three major averages finished in a positive zone.

The Dow Jones Industrial Average managed to recover from one of the steeper declines, thanks to gains from companies like IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT), and Salesforce (NYSE: CRM). The Nasdaq Composite Index has also risen 49.09 points to 14,069.42. The tech-heavy index continued with the positive run, led by DocuSign (NASDAQ: DOCU), Zoom Video (NASDAQ: ZM), and CrowdStrike (NASDAQ: CRWD).

Tuesday brought us an earnings report from Oracle

Although it was a slim week for the earnings reports, Oracle (NYSE: ORCL) announced its last quarter results, as well as plans and guidance. The results are better than expected, as the achieved revenues were $11.23 billion (compared to the expected $11.04 billion) and the achieved adjusted earnings of $1.54 per share (compared to the expected $1.31). On the other hand, the company revealed its quarterly revenue guidance, which is lower than expected due to the plans to increase investments to support its cloud strategy and keep migrating existing on-premises customers to the cloud. This all led to a share fall of 5%, as many investors are skeptical if Oracle can successfully compete with major “cloud” players like Amazon (NASDAQ: AMZN), Salesforce, or Workday (NASDAQ: WDAY).

Adobe reported impressive results on Thursday

The Wall Street analysts recognized the work-from-home trend and this second digitization era as the main reasons for Adobe’s (NASDAQ: ADBE) sustained growth and therefore a monster quarter. And they were right. The company reported revenues of $3.84 billion, which is an increase of 23% compared year to year. That is also above the Wall Street estimate of $3.73 billion. The digital media business revenues, consisting of Creative Cloud and Document Cloud, grew by 25% compared to the previous year. The adjusted earnings per share were $3.03, which is higher than the estimated $2.81. For the following quarter, the company expects revenues of $3.88 billion and adjusted earnings per share of $3.00.

Conclusion

All these factors taken together, proven by positive index movements and earnings results better than anticipated, support the fact that the economic recovery is firmly underway, and those are very encouraging news.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Several new earnings reports and more management presentations this week

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We might be witnessing the lower volume of quarterly earnings reports this week, but that only means we passed last quarter’s report peak and we are getting ready for the June-quarter earnings season, which will hit us not long after the 4th of July. However, we do not lack many management presentations, which are typical after announcing earnings reports. This week brings us news for future result expectations from more than 30 companies, so let’s try and not miss any important clues. Besides earnings reports, this week is bringing us a total of 9 new IPOs like Marqeta, Inc. (NASDAQ: MQ), TaskUs, Inc. (NASDAQ: TASK), LifeStance Health Group, Inc. (NASDAQ: LFST), monday.com Ltd. (NASDAQ: MNDY), Zeta Global Holdings Corp.(NYSE: ZETA) and Jaws Hurricane Acquisition Corp (NASDAQ: HCNEU).

Monday

Yesterday we saw the first quarter report of fiscal 2022 for Marvell Technology (NASDAQ: MRVL), a Delaware-based company that develops and produces semiconductors and related technology. Marvel Technologies reported new revenues of $832 million, which is an increase of 20% year-to-year. GAAP gross profit margin was 50.2% and non-GAAP gross margin was 64.3%, while GAAP diluted loss per share was $0.13 and non-GAAP diluted income per share was $0.29.

Also, Vail Resorts, Inc. (NYSE: MTN) which owns and operates several premier mountain resorts in Colorado and California, reported fiscal 2021 third-quarter results yesterday. The report showed a net income of $274.6 million which is an increase of 80% compared to the third fiscal quarter of 2020. The reported EBITDA was $462.2 million, which is a significant increase from last year same quarter’s $304.4 million.

Tuesday

Besides earnings reports from Navistar International (NYSE: NAV) and Calavo Growers (NASDAQ: CVGW) on Tuesday, we are also expecting reports from Thor Industries (NYSE: THO), Casey’s General Stores (NASDAQ: CASY), and ABM Industries (NYSE: ABM).

Wednesday

Wednesday is reserved for earnings reports from Brown Forman (NYSE: BF-B), United Natural Foods (NYSE: UNFI), and Restoration Hardware (NYSE: RH). RH, the California-based furnishing company is expected to report earnings of $3.99 per share, which is growth of over 214% compared to the same period last year. Also, GameStop Corp (NYSE: GME), one of the world’s largest video game retailer’s earnings report is expected on Wednesday. The expected loss for the first quarter is $0.68 per share, which is an improvement from the same period last year (-%1.61 per share). In order to accelerate its transformation, the company decided to restructure its board, so it can keep up with industry growth and company expansion in the digital arena.

Thursday

On Thursday, we expect to see reports from National Beverage (NASDAQ: FIZZ), Chewy (NYSE: CHWY), and Dave & Buster’s (NASDAQ: PLAY). Chewy, the Florida-based pet store retailer, is expected to report a quarterly revenue growth of over 125%, compared year over year.

Friday

We are not expecting any major earnings reports on Friday.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

The week may be starting slowly but do not let that mislead you

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The celebration of Memorial Day in the U.S. caused the slower start, but the rest of the week will bring us plenty of news, updates, and earnings reports from companies like Zoom Video Communications (NASDAQ: ZM), Hewlett-Packard Enterprise (NYSE: HPE), Advanced Auto Parts (NYSE: AAP) and Slack Technologies, Inc. (NYSE: WORK). This week will also bring us news from the EV and the IPO worlds, as well as the 2021 Bitcoin conference, one of the biggest cryptocurrency events this year. Before we move to the day-to-day highlights, if you are a small business owner, do not miss today’s deadline to apply for the latest round of the Paycheck Protection Program funding.

Tuesday

This week’s earnings reports will be led by Kirkland’s Inc (NASDAQ: KIRK), and that is due before the market opens. It will be followed by HP’s and Zoom’s earnings reports, after the bell. SoFi Technologies (NYSE: SOFI) is a fintech startup IPO joining the trading world after its SPAC merger on Friday.

 

Wednesday

Before the market opens on Wednesday, we are expecting the earnings reports from Advance Auto Parts and Lands’ End Inc (NASDAQ: LE). The reports will keep coming after the bell as well, so we are keen to see how NetApp Inc (NASDAQ: NTAP), Endeavor Group Holdings (NYSE: EDR), Splunk Inc (NASDAQ: SPLK), and PVH Corp (NYSE: PVH) did in the previous period. Wednesday is also the day when we are expecting the Beige Book, which will give us the latest analysis of the economic conditions in the U.S. as the COVID-19 restrictions reduce.

Thursday

Thursday is expected to be the busiest of the week, when we expect earnings reports from Express Inc (NYSE: EXPR), Asana Inc (NYSE: ASAN), Duluth Holdings Inc (NASDAQ: DLTH), Broadcom Inc (NASDAQ: AVGO), The Toro Company (NYSE: TTC), The Cooper Companies (NYSE: COO), Science Applications International Corporation (NYSE: SAIC), Lululemon Athletica (NASDAQ: LULU), as well as Slack Technologies.

Thursday is a big day for NVIDIA Corporation (NASDAQ: NVDA) also. After reporting the record profits and earnings, highly affected by the company’s revenues from graphic cards for crypto mining, the shareholders will vote on a 4-for-1 stock split. That will increase the number of authorized shares of common stock, and if approved, each shareholder will receive an additional dividend of three additional shares.

Thursday will be also interesting in the automotive world. Kia will start taking reservations for its new EV6 crossover, while Nio Inc (NYSE: NIO), the Chinese automaker, will hold a general meeting so it can increase the diversity of its board.

This day will also be dominated by cryptocurrencies, as the 2021 Bitcoin conference, taking place in Miami, will kick-off.

Friday

The week’s end is reserved for the earnings report from Hooker Furniture Corporation (NASDAQ: HOFT), and that is expected before the opening bell. During the rest of Friday, we will focus on the latest unemployment rates and data.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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