Investors react to Starbucks’ earnings
We discussed second quarter performance for Starbucks (SBUX) in an earlier series. Now, we’ll discuss the impact that performance had on the share price.
Shares traded flat after earnings release
Starbucks reported its earnings on July 24 after the market closed. On July 24, shares started trading at $79.59. The day’s high and low were $80.64 and $79.15, respectively.
Share volume was approximately seven million shares compared to an average daily volume of ~3.8 million shares. The shares closed at $80.45—up 2% from the previous day’s closing price of $79.14 according to NASDAQ.
Management stated that it’s on track to achieve its 2014 fiscal targets in 4Q14. It also stated that it will achieve a double digit top, 10% or better, and bottom line growth. This growth will be driven by 1,550 new stores that will be opened globally. Management expects global comparable sales in the mid-single digits going forward.
In terms of product expansion, the company will also be introducing several new flavored coffees, K-Cup along with Fall Blend. It will be introducing single-origin coffees in K-Cup, packaged coffee, and VIA lattes.
An investor who would like to invest in the restaurant industry as a whole can invest in exchange-traded funds (or ETFs) such as the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Food & Beverage ETF (PBJ).