Starbucks, Inc (NASDAQ: SBUX)
On Thursday, Starbucks reported strong first quarter earnings but lowered guidance slightly for the full fiscal year 2106. Despite record-breaking revenue and overall good numbers, investors pushed the company’s stock down almost 5% in after-hours trading.
For the first quarter of 2016, Starbucks reported revenue of $5.37 billion and operating income of $1.06 billion as compared to 2015 first quarter revenue of $4.8 billion and operating income of $915 million. Excluding a one-time gain during 2015, Starbucks reported non-GAAP net income per share of $0.46 for the first quarter of 2016, a 15% increase over $0.40 earned during the first quarter of 2015. Investors Business Daily
Starbucks CEO Comments
In the earnings press release, Howard Schultz, Starbucks chairman and CEO said:
“Starbucks record Q1 2016 financial and operating results, highlighted by comp sales increases of 9% in the U.S., 8% globally, another 4% increase in global traffic – and record performance from our Channel Development segment – underscore the accelerating strength and relevance of the Starbucks brand around the world. Successful retail, CPG, digital, mobile, loyalty, card and investment strategies are combining to accelerate our revenue growth and drive significant margin expansion and EPS leverage.” Business Wire
SBUX Technical Analysis
While SBUX is down so far in 2106 trading, the stock has performed significantly better than the broader markets. As of Thursday’s closing price Starbucks is down 1.7% so far in 2016 versus an 8.6% decline in the S&P index, SPX. During Thursday’s regular trading, SBUX gained 3.7% closing above the 9-day and 20-day moving averages at $59.03. The after-hours selling found support at $56.11, a level that was tested a few times. For a possible long trade, I will watch for early strength that keeps the stock above pre-market highs. If SBUX opens strong, the first level of resistance is the $58.00 support level established on Thursday. Next levels of resistance are near $59.03 and Thursday’s high of $59.38. Continued bullish trading could get the stock through the 50-day SMA at $60.19. If SBUX trades lower, the first level of support is near $56.11. A bearish market and a volume break of $55.50 could quickly get SBUX to the year to date low of $54.94.
Starbucks Company Profile
Starbucks Corporation is the roaster, marketer and retailer of specialty coffee. The Company purchases and roasts coffees that it sells, along with coffee, tea and other beverages, and a range of fresh food items, through Company-operated stores. It also sells a range of coffee and tea products and licenses its trademarks through other channels, such as licensed stores, grocery and national foodservice accounts. It operates through four segment: Americas, which includes the United States, Canada, and Latin America; Europe, Middle East, and Africa (EMEA); China/Asia Pacific (CAP), and Channel Development. In addition to its Starbucks Coffee brand, it also sells goods and services under the brands, including Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange and Ethos. Its Americas, EMEA, and CAP segments include both Company-operated and licensed stores. The Americas and EMEA segments include certain foodservice accounts, primarily in Canada and the United Kingdom. Google Finance