Starbucks is on track to impress investors with its fiscal third quarter 2023 earnings, with year-over-year growth on the top and bottom lines expected to be driven by a rebound in sales in China following the loosening of pandemic-related restrictions.
The Seattle-based coffee giant is expected to report earnings per share (EPS) of $0.95, up 13.1% from $0.84 in the year-ago quarter, when it posts its 3Q earnings after the market close on Tuesday, August 1.
Revenue is expected to rise from $8.2 billion in the year-ago quarter to $9.3 billion, per Zacks Consensus Estimate.
Same-store sales are forecast to increase by 11.12%, according to Refinitiv estimates, driven by international growth of 24.5%, with China sale-store sales expected to rise by 41.8%.
North American same-store sales are expected to rise by 8.2%, and in the United States by 7.7%.
Starbucks CFO Rachel Ruggeri said on the company’s 2Q earnings call in May that the company expects its EPS to step up in the second half of the fiscal year, improving sequentially in 3Q and 4Q.
“We expect year-over-year EPS growth in 3Q to be meaningfully lower than our fiscal guidance range of 15% to 20% with 4Q year-over-year EPS growth slightly above the high end of our guidance range,” Ruggeri noted.
On the company’s expectations for its performance in China during the remainder of fiscal 2023, Ruggeri commented: “We expect China's average weekly sales to sequentially grow in 3Q and 4Q but at a more moderate pace.”
“Acknowledging the uncertain environment, we expect China comp to improve in the back half of the year driven in large part by the lap of mobility restrictions in 3Q of the prior year coupled with the continued recovery, leading to low to mid-single-digit comp on a full year basis.”
Starbucks shares traded modestly higher on Monday afternoon, up 0.3% at US$101.55 ahead of its results.
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