Starbucks Beats Expectations in First Report Under New CEO

Starbucks Earnings Highlights

• Starbucks reports adjusted EPS of 74 cents, beating expected 65 cents
• Q1 revenue of $8.72 billion exceeds expected $8.4 billion
• FY23 projected revenue growth of 10-12% and adjusted EPS growth of 15-20%

Starbucks Earnings Overview

Starbucks has released its quarterly earnings report, with earnings per share of 74 cents adjusted versus the expected 65 cents, and revenue of $8.72 billion, exceeding the expected $8.4 billion, according to Refinitiv.

This marks Laxman Narasimhan’s first report as CEO after taking over from Howard Schultz in late March, just days before the company’s annual shareholder meeting. Despite not being present on the conference call, Schultz’s presence looms large over the quarter, given his tenure as CEO.

Investors are particularly interested in how Starbucks is performing in its two largest markets: the United States and China. In the US, the coffee chain has not yet experienced significant shifts in consumer spending, which goes against the broader trend in the restaurant industry.

Analysts expect this trend to continue in the company’s fiscal second quarter. In China, however, same-store sales are showing signs of improvement. This is following  the government’s roll back of its zero Covid policy in December.

While other consumer companies like Procter & Gamble and Restaurant Brands International have already reported rebounding sales in China during the first three months of the year, their recoveries are still in their early stages.

For fiscal year 2023, Starbucks is projecting revenue growth of 10% to 12%. And adjusted earnings per share growth on the low end of 15% to 20%. The company’s shares have increased by 14.6% this year, bringing its market value to $131 billion.

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