2017 revenue expectations
Analysts expect Starbucks (SBUX) to post revenues of ~$22.9 billion in fiscal 2017, which represents 7.3% growth from $21.3 billion. The company’s management modified its revenue growth guidance to range from 8%–10% from the earlier 10%.
Factors that could affect Starbucks’s revenue growth
Analysts are expecting positive same-store sales growth (or SSSG), unit growth, and a strong performance from its Channel Development segment to drive Starbucks’s fiscal 2017 revenues. The company’s management expects its 2017 SSSG to be in the mid-single-digit range, and it also expects to add 2,100 new restaurants in fiscal 2017.
Analysts expect Starbucks’s 2017 SSSG to be driven by newly remodeled stores, one-to-one personalized selling, menu innovations, and customer experience enhancement through the Roastery and the new Reserve store formats.
The increased adoption of the Starbucks Rewards membership program and the digital flywheel by its customers, as well as technological innovations such as mobile order and payment systems, are also expected to contribute toward Starbucks’s 2017 SSSG.
Moving to Channel Development, Starbucks is partnering with Anheuser-Busch InBev to launch new ready-to-drink tea products in February 2017. The strong sales of K-Cups, Roast and Ground sales, and Ready-to-Drink products should continue for the rest of fiscal 2017. These sales, along with its new ready-to-drink tea products, are expected to boost revenues from this segment.