Starbucks Q1 FY10 main trends

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Starbucks (NASDAQ: SBUX) will release its first quarter 2018 results on Thursday, January 25, following the company’s downward revision of its long-term growth target as part of its FY2017 results announcement, and we will follow closely Comparable sales of the company Customer traffic and revenue growth figures – first quarter of 2018.

Analysts on the quarter earnings and EPS (earnings per share) is expected to have increased over the previous two quarters and the same quarter last year.
Although the company has lowered its growth forecast, Starbucks is taking some steps to boost growth as it is battling the decline in customer traffic. In Q4 2017 earnings, the company announced the opening of its mobile ordering platform to all its customers, regardless of the membership of its rewards program. This move could potentially bring a larger customer base to the company’s digital umbrella and, eventually, traffic. The company also partnered with Chase Bank to launch a joint brand Visa credit card that allows customers to earn bonus points through transactions.

Improve the industry dynamics

For the quarter ended December 2017, the overall catering industry was very optimistic and its comparable sales increased slightly. Although the traffic has been declining, in the gourmet and upscale casual dining restaurants, guests’ check sizes have been accelerated. Top food brands may perform better in 2018 and Starbucks should benefit from this trend. In addition, the company’s focus on Chinese food and aggressive expansion is likely to be the major growth driver in the future. Overall, the first quarter of 2018 is probably the positive quarter for Starbucks. We closely monitor its comparable sales growth and may exceed our current estimate of $ 52 for the company if it exceeds our growth expectations.

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