The world's largest coffee chain gets major chunk of its sales from the United States, where the restaurant chains are struggling to boost top lines amid tough competition. Same-store sales in the U.S.-led Americas region rose 5 percent for the fourth quarter, in line with Deutsche Bank and consensus. In the same quarter last year, both global and U.S. comps grew 8 percent.
“While it is hard to argue with SBUXs LT strategic, operational or financial dominance, we cannot look past the near-term sales slowdown or lowered EPS outlook,” Deutsche Bank analyst Brett Levy wrote in a note.
For the first quarter, Starbucks expects EPS of $0.51–0.52 (Deutsche Bank/consensus expectations at the time of the report was $0.55).
For FY17, the company sees EPS of $2.12–$2.14 versus Deutsche Bank/consensus expectations of $2.14 and $2.16, respectively. The EPS growth at the low end of the company's long-term +15–20 percent algorithm
Further, Starbucks predicts FY17 revenue growth of 10 percent on mid-single digit growth in same store sales.
“We view SBUX as a best in class restaurant co., but we are cautious on the recent sales and earnings trends, causing us to remain Hold rated with a $59 PT,” Levy added.
|Oct 2016||RBC Capital||Maintains||Outperform|
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.