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Starbucks Headed for Outsized Growth, Shares Pop

Published 12/11/2020, 12:24 AM
Updated 12/11/2020, 12:25 AM
SBUX
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By Christiana Sciaudone

Investing.com -- Starbuck expects "outsized growth" for the coming years. 

Shares of the coffee purveyor rose 4.4% after it said in a presentation that fiscal 2022 and 2023 are looking promising, while fiscal 2021 will be a recovery year.

Starbucks (NASDAQ:SBUX) reiterated the company’s fiscal 2021 forecast of adjusted earnings per share of $2.70 to $2.90. For fiscal year 2022, Starbucks expects outsized annual non-GAAP EPS growth of at least 20%, inclusive of the negative impact of lapping a 53-week year. Earnings per share for fiscal 2023 and fiscal 2024 are expected to grow between 10% and 12%, according to a presentation by Chief Financial Officer Patrick Grismer.

The stock is trading at a record, despite recording lower revenue for the past three quarters compared to the same periods a year earlier. The company had reported record quarterly earnings for the end of 2019.

"Looking ahead, coffee remains a very large and attractive market that is growing globally," said Chief Executive Officer Kevin Johnson in a statement. "We are focused on growing category share and believe Starbucks is better positioned than ever for continued success.”

Starting in fiscal 2023, Starbucks expects company-operated comparable store sales growth of 4% to 5% annually, both globally and in the U.S., up from 3% to 4% previously.

In China, Starbucks now expects comparable store sales growth of 2% to 4% annually starting in FY23, a one percentage-point increase from the previous range of 1% to 3%.

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