Starbucks Corp is finally giving green lights for its second-quarter revenue. The coffeehouse chain company has been reporting declines in sales due to the COVID-19 pandemic. However, sales in the United States and China might be starting to get back on track as speedy vaccinations are making customers more comfortable with their morning coffee runs.
The $6.82 billion revenue in the second quarter will account for Starbucks a 13.7% increase from a year ago. It is also 8.1% higher than the record from 2019, Refinitiv data shows. Additionally, America’s revenue is forecasted to jump 7.1% from the previous year to $4.64 billion.
Starbucks’ earnings per share are also predicted to go up from 32 cents to 53 cents. Refinitiv data further reveals that Starbucks’ average “buy” rating on Wall Street and median price target reaches $119. Accordingly, Starbucks’ last traded shares went up at $115.71, signing an over 53% rise in the last year.
Starbucks: keeping the business afloat during the pandemic
Starbucks reportedly struggled through the pandemic. The world largest coffee chain recorded a significant decline in sales as rising infections required people to stay at home. This waters down the incoming sales from office workers’ morning coffee routine. Instead, coffee at home has become a more accessible, safer option.
Furthermore, Starbucks had no other option but to close some of the chains due to the pandemic severity difference in several places. Some others had to operate under heavily limited capacity. This has been happening for a year, and the situation is getting better for Starbucks with the ongoing speedy vaccinations in several places.
Quoted from Reuters, Edward Jones analyst Brian Yarbrough said in relation to Starbucks’ business that “Not everyone’s gone back to work, but a lot of people have. So in the mornings you go by the Starbucks and you’re back to seeing drive-thrus having long lines.” Yarbrough further added that the coming quarters will prove the benefit of the US economy reopening on Starbucks.
Starbucks’ online order service, loyalty program and drive-thru lanes are what keeping Starbucks afloat, analysts say. Nick Setyan of Wedbush Securities said, “They’re doing a lot of right things. The digital mix is now over half the business, mobile pay is a quarter of transactions and the newer menu items have seen a lot of traction.”
“So they have a lot of visibility into customer habits, more so than any other name in the industry.”
Read also: Starbucks Sees Decline in Quarterly Sales
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