By Andria Cheng
Starbucks Corp. is scheduled to report fiscal fourth-quarter
earnings after the close of trade on Thursday. Investors will be
keen to see if the coffee-house chain can again post same-store
sales growth of at least 5%, as it has for each of the past 18
quarters.
Here are some other things investors can expect:
EARNINGS FORECAST: Starbucks is expected to report earnings of
74 cents a share, up from 60 cents a share in the same period a
year earlier, according to analysts surveyed by FactSet. The
analyst estimate is the midpoint of Starbucks's July forecast for
per-share earnings between 73 cents and 75 cents.
REVENUE FORECAST: Starbucks is expected to report sales of $4.24
billion, up from $3.80 billion in the year-earlier period,
according to FactSet
STOCK REACTION: Starbucks shares have fallen 2.4% this year
through morning trade Thursday, compared with a 7.4% gain for the
S&P 500.
WHAT TO WATCH:
--COFFEE PRICES: Investors will expect an update on the recent
spike in coffee prices, which are expected to pressure margins
heading into 2015. Wells Fargo analysts said they would look for
details on the company's commodity hedging, although they expect
any pressure to be mitigated by cost cuts and the impact of a
higher mix from food, which typically carries a higher margin.
--SODA UPDATE: Wells Fargo is also expecting an update on the
company's June entry into the carbonated beverage market with the
introduction of Fizzio handcrafted sodas. Analysts said channel
checks suggest the business may have fallen short of expectations,
citing feedback from baristas who have said the drinks are not very
popular.
--JAPAN BUSINESS: Investors will listen for news on Starbucks'
Japan business, after the company in September agreed to buy the
60.5% stake in that business it did not already own. Japan is the
company's second-largest market.
--MOBILE PAYMENTS: Starbucks has said mobile payments represent
over 15% of U.S. transactions in company-owned stores. Investors
will look for an update on Apple Pay, after Apple (AAPL) said on
its website that Starbucks will start to accept Apple Pay later
this year.
-Andria Cheng; AskNewswires@dowjones.com
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