Starbucks Corp (NASDAQ:SBUX) Earnings Model
Author: Ahmad Yousef, Published: July 20, 2019 8:30pm Category: Earnings Preview (Prior to the F3Q2019 SBUX Results)
The main factors that influence and contribute to this Starbucks Model are the forecast of comparative store sales, net new stores and operating margins. One major assumption made in the model is increased competition in China from Luckin (a major Starbucks competitor), and other coffee companies in the country. Because of this assumption, this model does not predict that Starbucks will add 1100 (company guidance) new stores in the China/Asia Pacific region. As a result of the increased competition, I am also modeling a decline in the comparative stores sales in the back half of the year. Although I am a bit pessimistic on the future outlook of the CAP segment, I am still bullish on Starbucks overall. This is due to the anticipated growth in the Americas from their launching of new beverages and the updates to their loyalty program. Subsequently, due to these assumptions, I am modeling significant growth in operating margins and revenues in the Americas.
Disclosure: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.