|12:44 EDT||SBUX||Earnings Watch: Starbucks sees Q3 adjusted EPS 40c-41c|
Starbucks (SBUX) is scheduled to report third quarter results after the market close on Thursday, July 23, with a conference call scheduled for 5:00 pm ET. Starbucks purchases and roasts whole bean coffees and sells them, along with brewed coffees, Italian-style espresso beverages, cold blended beverages, food items, teas, and beverage-related accessories and equipment, primarily through company-operated retail stores. EXPECTATIONS: Analysts are looking for earnings per share of 41c on revenue of $4.86B, according to First Call. The consensus range for EPS is 40c-42c on revenue of $4.75B-$4.96B. In April, Starbucks forecast Q3 adjusted EPS of 40c-41c, Q4 adjusted EPS of 42c-43c, and backed its fiscal year 2015 adjusted EPS view of $1.55-$1.57, against estimates at that time for $1.57. The company also backed its FY15 revenue growth view of 16%-18%, with global comparable store sales growth of mid-single digits, consolidated tax rate of approximately 31% and capital expenditures of approximately $1.4B. LAST QUARTER: Starbucks reported second quarter EPS of 33c, in-line with analysts' estimates, on revenue of $4.6B, beating analysts' estimates of $4.53B. Starbucks said global comparable store sales increased 7%, with a 3% increase in traffic. Americas comp sales increased 7%, with a 2% increase in traffic; CAP comp sales increased 12%, driven by a 10% increase in traffic; EMEA comp sales increased 2%, driven by a 2% increase in traffic. NEWS: At May's Bernstein Annual Strategic Decisions Conference, Starbucks said mobile payments are exceeding expectations, and CEO Howard Schultz noted that "I'm not going anywhere." During the quarter, Starbucks announced plans to raise drink prices by 5c-20c and announced a music partnership with Spotify. The company said it will close all 23 La Boulange retail locations, as La Boulange stores "are not sustainable for the company's long-term growth." Starbucks Mobile Order & Pay, which began as a pilot in Portland in December 2014 and launched in the Pacific Northwest in March 2015, expanded to stores in 21 more states in the southern and central United States in June. Starbucks announced plans to join with over a dozen companies, including CVS Health (CVS), Microsoft (MSFT) and Wal-Mart (WMT), to hire 100,000 16-to-24-year-olds as part- and full-time employees, interns and apprentices by 2018. STREET RESEARCH: On the day after its last earnings report, UBS raised its price target on Starbucks shares to $57 from $48, calling it "best-in-class" due to strong momentum and promising pipeline of innovation across both product and strategic programs. BMO Capital said it expects the company to exceed expectations over the next several years, and it kept an Outperform rating on the shares. BTIG recently initiated Starbucks with a Buy rating and $64 target. PRICE ACTION: Ahead of Thursday afternoon's earnings report, shares are down 0.4% to $56.47.