Sbux is scheduled to report fiscal q1 ’12 earnings after the bell tonight, with analyst consensus looking for $0.49 in eps (versus $0.45) one year ago, on $3.3 bl in revenues (versus $2.95 bl a year ago) for expected y/y growth of 9% in eps and 12% in revenues. Analyst estimates for both revenue and eps have steadily creeped higher over the last year.
US comp’s were 10% last quarter, and have been on a tear, with traffic driving the majority of the comp growth. Traffic was the best in the last 5 years per one of our notes from last qtr. China is comping at 30%.
SBUX has been a standout performer in what has been a tough period for retail and some restaurant stocks as it trades close to an all-time high today. The stock pulls back minimally for short periods of time and then continues its steady march higher, in what was a tough tape the last year. Since it last reported eps, the stock is up 20%.
The company just changed its reporting structure to a regional level, with the Americas now comprising 77% of revenues and 78% of operating income.
When reading analyst reports over the last few years, one thing that has become clear is that the CPG or Consumer Products Group (which SBUX assumed from Kraft) is one of the secular drivers going forward. Just 7% of revenues currently and 12% of EBIT this division is expected to drive growth and margins going forward, particularly as coffee costs come down. Per a note out of BMO last qtr, that firm thinks that SBUX can grow CPG revenues and eps 30% through 2015.
China / Asia / Pacific is about 8% of EBIT with a 35% margin, versus a 20% margin in the Americas, per a report out of Deutschebank.
SBUX valuation isnt cheap: forward estimates are for $1.83 this (20% growth) and $2.23 in fiscal ’13 for 22% growth, leaving SBUX trading at 26(x) and 21(x) forward estimates, with a lot of high expectations factored into those estimates. At $40 per share, SBUX was trading at 21(x) cash-flow as of last quarter’s numbers. Nothing about the stock is really cheap.
The chart looks great, but is substantially overbought, and we’d love to see it come in before adding to positions.
That being said, the coffe retail giant has executed superbly the last 2 years.
(long SBUX – havent added or subtracted in a while)
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