Upcoming AWS Coverage on Panera Bread Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 3, 2017 / Active Wall St. announces its post-earnings coverage on Starbucks Corp. (NASDAQ: SBUX). The Company posted its first quarter fiscal 2017 results on January 26, 2017. The coffee giant's earnings met market expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Starbucks' competitors within the Specialty Eateries space, Panera Bread Co. (NASDAQ: PNRA), announced on January 06, 2017, that it will report its Q4 FY16 and full year results after the market close on Tuesday, February 07, 2017. AWS will be initiating a research report on Panera Bread in the coming days.

Today, AWS is promoting its earnings coverage on SBUX; touching on PNRA. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=SBUX

http://www.activewallst.com/registration-3/?symbol=PNRA

Earnings Reviewed

For the quarter ended January 01, 2017, Starbucks reported consolidated net revenues of $5.7 billion, an increase of 7% over Q1 FY16. The Company's sales numbers came in below analysts' estimates of $5.83 billion. Starbucks Global comparable store sales increased 3%, comprising of 3% increase in the Americas, a 5% increase in China/Asia Pacific, and a 1% decrease in EMEA.

For Q1 FY17, Starbucks' US comparable store sales increased 3% comprised of a 5% increase in average ticket and a 2% decrease in transactions, however the same store sales were below analysts' expectations of 3.8% growth. The Company noted that a record $2.1 billion loaded on Starbucks Cards in the US and Canada in Q1 FY17, up 15% on a y-o-y basis. Starbucks Card transactions reached 40% of US Company-operated transactions. Active membership in Starbucks Rewards grew 16% y-o-y to 12.9 million members in the US Mobile Order and Pay represented 7% of US Company-operated transactions in the reported quarter, up from 3% in the prior year. The Company opened 649 net new stores in the reported quarter, bringing total stores to 25,734 in 75 countries worldwide.

Starbucks' consolidated operating income grew 7% to $1.13 billion in Q1 FY17, up from $1.06 billion in Q1 FY16. Starbucks consolidated operating margin expanded 10 basis points to 19.8% primarily due to sales leverage and lower commodity costs, mainly coffee. The increase was partially offset by higher investments in its store partners primarily in the Americas segment.

For Q1FY17, Starbucks reported GAAP EPS of $0.51, up 11% over Q1 FY16, while non-GAAP EPS of $0.52 increased 13% over Q1 FY16. The Company's non-GAAP numbers were in-line with market expectations.

Segment Results

During Q1 FY17, net revenues for Starbucks' Americas segment were $4.0 up 7% over Q1 FY16. The increase was driven by incremental revenues from 884 net new store openings over the past 12 months and 3% growth in comparable store sales. The segment's operating income grew 3% to $958.5 million in Q1 FY17 from $934.6 million in Q1 FY16. Operating margin of 24.0% declined 110 basis points on a y-o-y basis.

For the China/Asia Pacific segment's net revenues grew 18% over Q1 FY16 to $770.8 million in Q1 FY17. The increase was primarily driven by incremental revenues from 1,003 net new store openings over the past 12 months, 5% growth in comparable store sales, and favorable foreign currency translation.

The segment generated operating income of $163.4 million for Q1 FY17, up 29% compared to operating income of $127.1 million in Q1 FY16. Operating margin expanded 180 basis points to 21.2% primarily due to changes in certain business tax structures in China and higher income from its joint venture operations, which was partially offset by the impact of foreign currency translation.

During Q1 FY17, net revenues from Starbucks EMEA segment were $262.4 million in Q1 FY17, down 16% on a y-o-y basis. The decrease was attributed to a shift to more licensed stores in the region, as well as unfavorable foreign currency translation. Partially offsetting the decrease was incremental to revenues from the opening of 489 net new licensed stores over the past 12 months.

EMEA operating income fell 8% to $44.1 million in Q1 FY17, down from $48.1 million in Q1 FY16. Operating margin expanded 140 basis points to 16.8% primarily due to sales leverage driven by the shift in the portfolio towards more licensed stores.

Starbucks Channel Development segment reported an 8% increase in revenues to $553.7 million in Q1 FY17, primarily driven by increased sales of premium single-serve and packaged coffee products, supported by increased international and foodservice sales. The segment's operating income surged 26% y-o-y to $242.9 million in Q1 FY17, while operating margin expanded 620 basis points to 43.9%, primarily driven by lower coffee costs, higher income from the North American Coffee Partnership, and leverage on cost of sales and other operating expenses.

Outlook

Starbucks is forecasting GAAP EPS in the range of $2.09 to $2.11 and non-GAAP EPS in the range of $2.12 to $2.14 for FY17. The Company expects consolidated revenue growth to be in the range of 8% to 10%. For FY17, Starbucks is forecasting to open approximately 2,100 net new stores globally and continue to expect mid-single digit comparable store sales growth globally.

Stock Performance

At the closing bell, on Thursday, February 02, 2017, Starbucks' stock was slightly down 0.06%, ending the trading session at $53.87. A total volume of 15.27 million shares were traded at the end of the day, which was higher than the 3-month average volume of 9.54 million shares. In the previous three months, shares of the Company have advanced 3.08%. The Company's shares are trading at a PE ratio of 27.63 and have a dividend yield of 1.86%.

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