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Factors Setting the Tone for Starbucks' (SBUX) Q3 Earnings

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Starbucks Corporation SBUX is scheduled to report third-quarter fiscal 2021 results on Jul 27, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 19.2%.

Q3 Estimates

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 77 cents per share, indicating a turnaround of 267.4% from a loss of 46 cents in the year-ago quarter. The consensus mark for revenues stands at $7.24 billion, suggesting growth of 71.5% from the year-ago quarter.

Factors to Note

The company’s fiscal third-quarter performance is likely to have benefited from opening stores in new and existing markets, remodeling existing stores and digital offerings. Robust Americas and international sales are likely to have contributed to the company’s performance in the to-be-reported quarter. China and the Asia-Pacific regions have been gaining from unit growth, rising brand awareness and increased usage of the digital/mobile/loyalty platforms. In the second quarter, mobile order sales hit record sales of 34% in China, compared with 30% in first-quarter fiscal 2021. The trend is likely to have continued in the third quarter. Over the past year, mobile order sales have doubled in China.

Robust comparable sales continue to drive the company’s results. It continues to anticipate global comparable sales to increase between 18% and 23% in fiscal 2021. Starbucks anticipates Americas and U.S. comparable store sales to improve in the range of 17% to 22% in fiscal 2021. International comps for the fiscal 2021 are expected in the band of 25-30%. The company anticipates China comparable store sales growth to be 27-32%.

The Zacks Consensus Estimate for revenues for Americas and International segments is anticipated to witness year-over-year increase of 74.5% and 104% to $4,896 million and $1,938 million, respectively.

However, resurgence in coronavirus cases in some parts of the world might have impacted the company’s performance in the quarter to be reported. Pandemic may have weighed on the company’s traffic in the quarter.

Starbucks Corporation Price and EPS Surprise

Starbucks Corporation Price and EPS Surprise
Starbucks Corporation Price and EPS Surprise

Starbucks Corporation price-eps-surprise | Starbucks Corporation Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Starbucks has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of +1.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Retail-Wholesale space that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Papa John's International, Inc. PZZA currently has a Zacks Rank #2 and an Earnings ESP of +6.56%.

BJ's Restaurants, Inc. BJRI has a Zacks Rank #2 and an Earnings ESP of +16.33%.

Chuy's Holdings, Inc. CHUY has a Zacks Rank #2 and an Earnings ESP of +1.02%.


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BJs Restaurants, Inc. (BJRI) : Free Stock Analysis Report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

Papa Johns International, Inc. (PZZA) : Free Stock Analysis Report

Chuys Holdings, Inc. (CHUY) : Free Stock Analysis Report

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