$Starbucks(SBUX.US) (-7% AH, no position) after 2Q metrics missed expectations and the company’s 3Q outlook fell flat. The company’s return on increased investment in stores and labor are clearly taking longer than new CEO Brian Niccol had expected.
2Q results:- Adj EPS $.41 vs $.49 est- SSS -1.0% vs -0.6% est - Adj oper margin 8.2% vs 9.5% est- Revs of $8.88B in line with expectations The new CFO declined to provide a 3Q outlook but said the Q3 topline was “following normal seasonality.” In another comment, CEO Niccol said there “are better measures than EPS right now to track the progress” which likely unnerved investors. The biggest obstacle for the stock: 3Q and 4Q SSS comp expectations are too high at +1.2% and +3.1% respectively after 2Q comps of -1%. Lower comps plus the 2Q EPS shortfall strongly suggest FY’25 eps ests are likely to fall another 5-6% (currently $2.89, -13% vs FY’24).The copyright of this article belongs to the original author/organization.
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