Starbucks Corp (NASDAQ:SBUX) Earnings Model
Author: Greyson Sklba, Published: July 17, 2019 9:00pm Category: Earnings Preview (Prior to the F3Q2019 SBUX Results)
SBUX FQ3Q19 Forecast Breakdown
Americas Segment:
range at 6.9%.
- Net New Company Operated Stores Added – Q3 93 New stores and for Q4 82 New stores. This comes to a total of 258 new stores for the year, down from the previous year but still signaling growth.
- Comp Stores Sales Rate – Q3 4.48% and for Q4 3.4%. I believe success of the new customer rewards program and the new cold beverages will be shown in the third and fourth quarters of the year.
- Net New Licensed Stores Added – Q3 138 and Q4 117. This brings the total for the year to 428 and keeps the America Total Net Store Additions in management’s guidance of 600-700 at 686.
- Average Revenue Per Licensed Store – Q3 Increased by 2.4% from the year prior and for Q4 increased by 2.5%.
- Operating Expense as a Percent of Revenue – Q3 74.2% and Q4 74.1%. Used goal seek to get America Total Operating Margin (“Up Slightly” According to Management’s Guidance) to 21.7%.
- CAP Total Net Store Additions – Management’s guidance is about 1100 new stores. I came to 1075, which falls close to guidance.
- Net New Company Operated Stores – Q3 214 and Q4 218. The logic for this increase is there will be significantly more company operated stores than licensed stores in China. I believe Starbuck’s will add this number of stores to keep up with the large growth of competitor Luckin Coffee.
- Net New Licensed Stores Added – Q3 87 and Q4 93. This is an increase from previous quarters but still significantly less than Company Operated Stores Added.
- Comp Store Sales – Starbuck’s does not give decimals places for Comp Store Sales. Following the trend of increased competition in China, Q3 I have 2.1% and Q4 1.9% just to again highlight the increased competition in China.
- CAP Total Operating Margin – Up about 13 Basis points from the previous quarter; which, is slightly above management’s guidance.
- To adjust the CAP Total Operating Margin, I changed the Operating Expense as a Percent of Revenue – Q3 71.8% and Q4 72%. This brings CAP Total Operating Margin to 19.37%; which, is roughly flat at 19.4% from Q2.
- Net New Company Operated Stores Added – Q3 (30) and Q4 (25). This follows the trend from previously this year and years past.
- Net New Licensed Stores Added – Q3 151 and Q4 157. Following management’s guidance, I have a total of 401 Total EMEA Net Store Additions. Virtually all of them are licensed.
- Average Revenue Per Licensed Store – Q3 and Q4 I changed the growth rate to 3% because management made a comment about their average ticket size increasing.
- Operating Expense as a Percent of Revenue – I adjusted these numbers to allow Total EMEA Operating Margin to improve slightly over the course of FY19. Q3 91.1% and Q4 89.75%.
range at 6.9%.
|
| |||||
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.