Starbucks ambition to aim higher number in quarterly sales, unfortunately, does not turn into a reality. Instead, Starbucks had to suffer from a slight decline in the valuation of its shares due to sales miss estimation.
Starbucks posts improvement in sales
Starbucks is, undoubtedly, performing better. CFO Kevin Johnson revealed that sales in the US have returned to pre-pandemic levels. The sales in China even almost doubled from the same period from a year prior, when the pandemic slowed down businesses.
Sales recovery in the two countries boosted Johnson’s confidence in the upcoming result. “When you look at the progress we’re making on vaccinations, certainly in the U.S., that’s a proxy for what’s going to happen around the world,” Johnson said, as quoted from Reuters. This, however, might still be difficult in some parts of Asia and Europe, where recovery is still relatively slow compared to the US and China.
Accordingly, sales in America rose 9% thanks to vaccinated consumers come back. Reuters also noted that Starbucks leveraged its revenue 11% higher to $6.67 billion. The coffee chain company further mentioned that its active Rewards loyalty program grew 18% higher to $22.9 million.
“I believe we have an opportunity to double that number,” Johnson said. “I’m not going to give a time frame, it might take a couple of years.”
A lot of analysts also believe that Starbucks can only have more improvements in the upcoming days. Sooner or later, people are expected to swarm cafes and other gathering spots like Starbucks for social interactions, signing for higher sales.
“It is still going to be a while before people are both able to and comfortable with doing this again,” said Euromonitor International consultant Matthew Barry.
Starbucks: sales are good, but not good enough
Despite all the rises in Starbucks’ overall achievement, the company still fails to meet Wall Street expectations. The 35% rise in the company’s international markets is still below the expected 48.35% growth, IBES data from Refinitiv shows. Additionally, Starbucks’ 11% incline in the revenue still falls short of the estimation at $6.82 billion.
As a result, Starbucks shares went down 2%, Reuters reports.
Still, Starbucks is still keeping its confidence for the next fiscal year. The company increased its sales projections for 2021 to range from $28.5 billion to $29.3 billion. . Adjusted earnings per share are expected to range between $2.90 and $3.50. Additionally, analysts predict $28.61 billion in sales and $2.85 per share earnings.
Read also: Starbucks Signs A Rise in Second Quarter Revenue
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