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What to Expect from Starbucks’s Revenue in Next 4 Quarters

Rajiv  Nanjapla - Author
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Dec. 4 2020, Updated 10:43 a.m. ET

Revenue estimates

In the next four quarters, analysts are expecting Starbucks (SBUX) to post revenue of $23.8 billion, which represents an increase of 8.4% from $22.0 billion in the corresponding quarters of the previous year.

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Revenue growth

Analysts are expecting revenue growth to be driven by the addition of new restaurants, positive same-store sales growth (or SSSG), and growth in CPG (consumer packaged goods) sales. In the last two quarters of fiscal 2017, the company management expects to open 1,000 restaurants with 50% of them in the CAP region.

Analysts expect the implementation of technological advancements, menu innovations, and growth in Starbucks Rewards members to drive the company’s SSSG during the next four quarters. The company introduced Midnight Mint Mocha Frappuccino, Emerald City Mule, the Unicorn Frappuccino, and Cascara Lemon Sour in fiscal 3Q17. With the intention of doubling its food business by the end of 2021, Starbucks introduced Mercato, a new food menu item, in Chicago in April 2017. The menu item was well received, which compelled the company to expand it to other markets also.

To overcome the congestion created from mobile orders and pay customers, Starbucks’s management has implemented a new digital ordering system (or DOM), which lowers the waiting period for customers.

Moving to CPG sales, Starbucks’s core Doubleshot and Frappuccino beverages are expected to drive its NACP partnership’s sales. The growth in distribution of Starbucks Nespresso-compatible capsules in the U.K. and France are expected to drive the company’s revenue from international markets. Also, the company has started shipping Teavana ready-to-drink teas from February 2017 through its partnership with Anheuser-Busch InBev (BUD).

Peer comparisons

During the same period, Dunkin’ Brands (DNKN) and Domino’s Pizza (DPZ) are expected to post revenue growth of 2.5% and 10.1%, respectively, while the revenue of McDonald’s (MCD) is expected to fall 11.9%.

Next, we’ll look at Starbucks’s earnings estimates for the next four quarters.

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