Schwab Network on $SBUX (Oct 29, 2026)
Starbucks' report was mixed: EPS of 80 cents beat the 71 cent forecast and comps rose 7.2%, but revenue fell 4% to $9.1 billion, missing estimates, largely on converting China retail to a licensed joint venture, and international stores fell short of some expectations. The speaker calls this good news because the US "Back to Basics" turnaround is starting to take effect and beat some expectations, and he reads the report as expecting transaction growth to continue, at least for now.
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Okay, when analyzing these numbers we see that Coinbase is now down 1.75% , but let's take a look at Starbucks, which is the last report of the day. It is now down about half a percent. And let's see why. This is a mixed report.
but let's take a look at Starbucks, which is the last report of the day. It is now down about half a percent. And let's see why. This is a mixed report. EPS exceeded expectations.
We saw it stand at 80 cents, beating the forecast of 71 cents and up 54% from last year. Operating profit (operating margin) stood at 14 percent. This is also better than expected, but we saw revenue decline 4% to $9.1 billion, missing expectations of $9.23 billion.
And they say the main reason for this decline is the conversion of China's retail operations to a licensed joint venture model.
However, there are some other potential problems here as well. Their comp sales grew 7.2%, beating the forecast of 6.23%. And US comp sales were also strong,
But if we look at fiscal year 2027, Starbucks is forecasting EPS of $3.15 to $3.25. The consensus was $3.13, so this is better than expected. Operating profit of 13.5 to 14 percent is also better than expected here.
And this guidance includes North American comp sales growth of approximately 4%, the addition of approximately 1,200 new stores, and consolidated net revenue of $700 million in the 53rd week, down 1% year-over-year.
Starbucks also says they are ahead of their 2028 financial framework targets.
Sam, I took a good look at this report, looking for a potential deal with Chipotle or a guacamole latte announcement, but there's nothing here. So what caught your eye?
Damn, I have to wait for my avocado frappuccino, but yeah, look, they denied those reports during the quarter. Those were a very interesting few days, but yes, there are some good points in this mixed report, and there are some bad points as well.
As you said, it's interesting that international stores haven't met some expectations, but the US turnaround plan is starting to take effect here. So the domestic market has actually exceeded some expectations.
I think this is good news, because they wanted to see the continuity and sustainability of that turnaround, especially under Nicole's "Back to Basics" campaign, which was working.
But I think this is an especially important lesson ahead of the holiday season. But from what is being said here, it seems like they expect transaction growth to continue, at least for now.
Yes, of course. There's no big fall, maybe there are some questions on the call. Starbucks shares fell about half a percent