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International Sales to Drive Starbucks' (SBUX) Q2 Earnings

Starbucks Corporation SBUX is scheduled to report second-quarter fiscal 2021 results on Apr 27, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 10.9%.

Q2 Estimates

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 52 cents per share, which indicates growth of 62.5% from earnings of 32 cents reported in the year-ago quarter. The consensus mark for revenues stands at $6.8 billion, which suggests an improvement of 13.4% from the year-ago quarter.

Factors to Note

The company’s fiscal second-quarter performance might have benefited from robust Americas and international sales. It has been gaining from operating fundamentals such as solid global footprint, successful innovations and digital offerings. After posting comps decline in second, third and fourth-quarter fiscal 2020 due to the coronavirus pandemic, it returned to growth in first-quarter fiscal 2021 and the trend is likely to have continued in second-quarter fiscal 2021.

Starbucks anticipates global comparable sales to increase between 18% and 23% in fiscal 2021. Moreover, it expects 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 to be 25-30%.

The Zacks Consensus Estimate for revenues for Americas and International segments is anticipated to witness year-over-year increase of 6.9% and 62.4% to $4,633 million and $1,839 million, respectively.

Moreover, robust drive-thru and deliver options are likely to have favored the company’s performance in the to-be-reported quarter. Moreover, China and the Asia-Pacific regions have been gaining from unit growth, rising brand awareness and increased usage of the digital/mobile/loyalty platforms.

However, margin contraction remains a concern. In first-quarter fiscal 2021, on a non-GAAP basis, operating margin came in at 15.5% compared with 18.2% in the prior-year quarter. The downtrend was due to sales deleverage, growth in wages and Americas store portfolio optimization expenses.

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 +7.42%. 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 #3. 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:

Jack in the Box Inc. JACK currently has a Zacks Rank #3 and an Earnings ESP of +5.77%.

Brinker International, Inc. EAT has a Zacks Rank #3 and an Earnings ESP of +8.37%.

Domino's Pizza, Inc. DPZ has a Zacks Rank #3 and an Earnings ESP of +2.75%.

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Jack In The Box Inc. (JACK): Free Stock Analysis Report
 
Starbucks Corporation (SBUX): Free Stock Analysis Report
 
Brinker International, Inc. (EAT): Free Stock Analysis Report
 
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