Earnings Preview: Starbucks

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 |  About: Starbucks Corporation (SBUX)
by: Theflyonthewall

Starbucks (NASDAQ:SBUX) is expected to report Q3 earnings after the market close on Thursday, July 26 with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for EPS of 45c on revenue of $3.33B. The consensus range is 44c-48c for EPS, and $3.23B-$3.82B for revenue, according to First Call. At June's William Blair Growth Stock Conference, Starbucks forecast Q3 EPS 44c-45c and Q4 EPS 46c-47c. The company also guided FY12 EPS $1.80-$1.82, consensus $1.83, and said 2H EPS growth would accelerate from 1H. Additionally, Starbucks forecast 2H commodity costs higher than a year ago, with north of $200M of commodity cost pressures for the year, but said it expected a tailwind in coffee prices in FY13. The company said it continued to struggle with macro challenges in Europe and said it was seeing increased pressure from EMEA in Q3. During the quarter, Starbucks launched Refreshers beverages globally, and announced plans to open 40 stores in India this year with joint venture partner Tata Group.

Analyst Views

Goldman recently said Starbucks' dollar shore of the Nielsen K-cup market was 15%, a new high, and believes this is just the beginning of its share gains. Baird remains confident that top-line momentum will be able to support strong earnings growth, but sees the potential for management to guide Q4 earnings below consensus. In the year-ago quarter, Starbucks reported EPS of 36c on revenue of $2.93B.