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Starbucks Earnings Miss Estimates as Margins Dip, but Turnaround Plan Progresses
29 Jul
Summary
- Starbucks Q3 earnings fell short of estimates
- Operating margin contracted by 680 basis points
- Company's "Back to Starbucks" plan showing improvement in U.S. transactions
Starbucks Corporation has reported its fiscal third-quarter earnings, which fell short of Wall Street estimates. For the three-month period ended June 30, the coffee chain posted adjusted earnings per share of $0.50 on revenue of $9.5 billion, compared to analyst expectations of $0.65 per share on $9.29 billion in revenue.
The company's operating margin contracted significantly, slumping 680 basis points to 9.9%, as weaker demand continued to impact profitability. However, Starbucks touted ongoing progress with its "Back to Starbucks" turnaround plan, pointing to its third consecutive quarter of improving U.S. transaction comps.
Comparable store sales fell 3% overall, with North America seeing a 2% decline. Despite the earnings miss, Starbucks' stock rose more than 4% in recent after-hours trading, as investors appeared to focus on the company's turnaround efforts.
