Starbucks Set To Report Q3 Financial Results; Analysts Watch International Segment And Union Strikes

NEW YORK — Coffee giant Starbucks Corporation (NASDAQ: SBUX) is set to report third-quarter (Q3) financial results after market close Tuesday.

Here is a look at earnings estimates, analyst price targets, and several key items on the minds of investors and analysts.

Earnings Estimates: Analysts expect Starbucks to report Q3 revenue of $9.29 billion, according to data from Zenger News Pro.

The Seattle-based company’s revenue in Q3 2022 was $8.15 billion year-over-year and $8.72 billion in the most recent Q2 report.

Analysts expect Starbucks to report Q3 earnings of 95 cents per share. The company reported earnings per share of 84 cents year-over-year for Q3 2022 and 74 cents in the most recent Q2 report.

Starbucks has beaten analysts’ estimates for revenue in five of the last six quarters. It has also beaten earnings per share estimates in three of the last four quarters.

In the second quarter, Starbucks saw revenue up 14% year-over-year.

Ahead of Starbucks’ Q3 earnings report, analysts shared updated notes with ratings and changed their price targets.

Here’s a look at recent analyst activity from July:

• Bank of America analyst Sara Senatore has a Buy rating and raised the price target from $131 to $150.
• Wells Fargo analyst Zachary Fadem has an Overweight rating and lowered the price target from $125 to $120.
• Morgan Stanley analyst Brian Harbour has an Equal-Weight rating and a price target of $104.
• Stephens & Co analyst Joshua Lang has an Equal-Weight rating and raised the price target from $103 to $110.
• Wedbush analyst Nick Setyan has a Neutral rating and raised the price target from $110 to $112.
• Citi analyst Jon Tower has a Neutral rating and lowers the price target from $117 to $112.
• RBC analyst Christopher Carrill has a Hold rating and a price target of $109.

One of the key items to watch during the earnings report is the company’s international segment.

For Q2, revenue was up 14% year-over-year and same-store sales were up 11% overall, with North America leading the way up 12% year-over-year. The international segment saw same-store sales up 7% year-over-year.

Store openings for the international segment could also be a key item to watch for investors and analysts.

Starbucks recently partnered with K-pop group BLACKPINK, marketing exclusive merch and drinks in several Asian countries. The partnership is expected to boost the international segment in the current Q4.

While the results from the partnership won’t be included in the upcoming earnings report, Starbucks may share an update on how the launch is going.

The company might also comment on the negative headlines of potential strikes related to unions that have formed at several of its stores.

Starbucks shares trade at $101.50 at the time of writing versus a 52-week trading range of $81.68 to $115.48.

Shares of the coffee company are up 20% over the last 52 weeks, but are trading relatively flat in 2023 with a year-to-date gain of 0.7%.

Produced in association with Benzinga

Edited by Jason Reed and Kyana Jeanin Rubinfeld