Starbucks boosts FY'21 EPS outlook despite continued sales hits from COVID-19

Starbucks Corp. on Jan. 26 boosted its GAAP EPS expectations for fiscal 2021 and offered guidance for its fiscal second-quarter after posting first-quarter adjusted EPS ahead of analysts' expectations. However, quarterly sales continued to reflect the sting from the coronavirus crisis.

Starbucks now expects its fiscal 2021 GAAP EPS in a range of $2.42 to $2.62, including a 10-cent impact due to an extra week in the fiscal year. The company previously guided for GAAP EPS between $2.34 and $2.54.

The company also said it expects non-GAAP EPS for its fiscal second-quarter in a range of 45 cents to 50 cents. U.S. comparable-store sales are expected to grow about 5% to 10% during the quarter, while China could see growth near 100%, Starbucks said.

For its first quarter ended Dec. 27, 2020, the coffee chain posted non-GAAP EPS of 61 cents, down 22.8% from 79 cents reported in the year-ago period but above the S&P Capital IQ mean consensus estimate for normalized EPS of 55 cents. Net earnings attributable to Starbucks in the fiscal first-quarter fell 29.8% year over year to $622.2 million from $885.7 million.

First-quarter revenue dropped 4.9% to $6.75 billion, below analysts' expectations of $6.92 billion. Global comparable-store sales fell 5% on a comparable basis, missing expectations of a 4.01% decline, according to Capital IQ. Impacts of the COVID-19 pandemic — including reduced customer traffic, modified operations, fewer store operating hours and temporary store closures — contributed to the sales and traffic declines, the company said.

Shares in Starbucks fell 1.3% in late trading on Jan. 26 to $103.31. The company reported earnings after U.S. markets closed.

Starbucks opened 278 net new stores during its fiscal first quarter, a 4% increase year over year, reaching 32,938 stores globally, the company said. Active members of the company's rewards loyalty program in the U.S. increased 15% year over year to 21.8 million.

The company also announced that COO Rosalind Brewer is stepping down from her position at the end of February to be the CEO of another unspecified, publicly traded company.

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