As Starbucks (NASDAQ:SBUX) approaches its next earnings release on Tuesday, 1 February 2022, investors will be hoping for strength, with analysts expecting the coffee chain to report earnings of $0.80 per share. These estimates would indicate year-over-year growth of 31.15%.
The company's fiscal first-quarter performance is likely to have benefited from robust comps growth and digitalization, while store expansion efforts probably contributed to the top line.
Starbucks expects to open nearly 2,000 net new stores worldwide and anticipates global comparable sales to reach high-single digits in fiscal 2022. The coffee giant further returned to record operating territory in fiscal 2021, with comparable-store sales rising 20% through late September. Executives said comps should increase by about 8% in fiscal 2022.
Though Starbucks has warned investors to expect lukewarm earnings this year, that will, ideally, lay the foundation for more margin expansion ahead, implying fiscal 2022 to be a pivotal year of investment.
Moreover, a resurgence in coronavirus cases in some parts of the world might have weighed on the to-be-reported results. During the fourth quarter of fiscal 2021, operations of Starbucks in China were affected by pandemic-induced restrictions across 18 provincial regions.
PREVIOUS QUARTERLY EARNINGS
In its fourth quarter of fiscal year 2021, Starbucks reported solid performances and an overall improvement to its gross and operating margins. However, both gross and operating margins have been in a long-term decline.
Comparingly, in Fiscal 2016 Starbucks Corp's gross margin peaked at 31.6% and now sits at 29%. In turn, its operating margin was 18.1% and is now 16.2%, signaling concern to some investors.
Recently, Stifel Nicolaus analyst Christopher O'Cull maintained a Hold rating on Starbucks and set a price target of $122. Currently, the company has an analysts consensus rating of Moderate buy.
Last Friday, Starbucks' shares closed at $97.21, close to its 52-week low of $93.79.
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