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Starbucks (SBUX) Stock Falls in After-Hours Trading

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Starbucks (SBUX) Stock Falls in After-Hours Trading

Starbucks shares bounced back during executives' call with analysts, many of whom say the company is known to issue conservative forecasts at the start of its fiscal year. The stock had changed +1.28% since market close yesterday.

"Starbucks record Q4 financial results, highlighted by stunning comp store sales increases of 8% globally, 9% in the United States driven by a 4% increase in global traffic, demonstrate the strength and relevance of the Starbucks brand around the world", CEO Howard Schultz said in a statement.

This story's headlines have been corrected to show that Starbucks is reporting results for the fourth quarter, not the third quarter. That growth marked a slowing from the double-digit comparable sales increases seen in the China/Asia Pacific in the two preceding quarters earlier this year.

We anticipate SSS guidance of sustainable mid-single digits and ~20% EPS growth in FY16, reflecting favorable coffee and dairy costs and faster growth from higher margin businesses of global CPG business and license stores. Starbucks also said it opened 524 net new stores in the quarter, for a total of 23,043 outlets in 68 countries. Starbucks expects first-quarter EPS of 43 cents to 44 cents and adjusted EPS of 44 cents to 45 cents, below the average 47 cents a share forecast by analysts.

Recently, UBS analysts released a report stating that Starbucks' industry-wide market share in the K-Cups segment rose by 40 basis points to 16.7%.

 

They estimate that Starbucks can generate 18% earnings per share growth this year and about 20% in fiscal 2016, even as the company has made significant investments in store labor and corporate technologies. Starbucks projects FY16 earnings of $1.87 to $1.89 per share, versus analysts' expectations of $1.88 per share. The company last month introduced an enhanced mobile app that allows customers to order and pay for their drinks before entering its cafes. Starbucks is viewed as a leader in mobile initiatives. It's the fifth straight year in which Starbucks has raised its dividend with this payment.

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