Starbucks Corp (NASDAQ:SBUX) Earnings Model
Author: Linh Nguyen Published: January 29, 2023
Model Forecast Thesis: High Inflation and interest rates will continue to put pressure on wages rates and supply chain cost. To reflect this opinion, I have increased Product and Distribution cost by 100 basis point each quarter for 2023 for N.A segment. 200, 100, 50 and 50 basis point respectively for quarter 1,2,3,4 for the International Segment.
Starbucks products remain in high demand globally and there is an increasing food attach rate. To keep up with the increasing customer demand, management has announced a plan to open up to 45,000 stores by fiscal year 2025. To reflect this trend and plan, I adjusted net store openings plan until 2025 as well as I have increased my average revenue per store estimate by 75 basis points each quarter of fiscal years 2023, 2024, and 2025.
Starbucks products remain in high demand globally and there is an increasing food attach rate. To keep up with the increasing customer demand, management has announced a plan to open up to 45,000 stores by fiscal year 2025. To reflect this trend and plan, I adjusted net store openings plan until 2025 as well as I have increased my average revenue per store estimate by 75 basis points each quarter of fiscal years 2023, 2024, and 2025.
Market Multiple Valuation Description: The Base Case PE multiple has been adjusted from 30x to 25x to reflect the fact that Fed will continue to increase interest rates. The market is pricing will continue to experience a substantial discount until end of 2023.
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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.