Starbucks Corporation (Sbux – Free report) reported the results of the second quarter of the 2025 financial year, the profits and net revenues missing the estimate of the Zacks consensus. The upper line has increased from year to year, while net profit decreased in the quarter of the previous year.
Following the results, the SBUX action decreased by 6.4% during the negotiation session after Tuesday's opening hours. The negative feelings of investors have been observed because the company has delivered disappointing profit performance, reflecting deterioration expenses and increased investments in stores.
Management recognized that the current results were below the potential of the company. Nevertheless, he highlighted fundamental progress through the four pillars of the recovery strategy – partners, coffee experience, customer commitment and marketing / menu. He stressed that Starbucks improves its agility to test, iterate and effectively fail initiatives, laying the foundations for long -term sustainable and sustainable growth and solid returns on invested capital.
Discussion on gains, income and SBUX comps
In the second tax quarter, the company declared a profit per share (BPA) of 41 cents, missing the estimate of the Zacks consensus of 49 cents of 16.3%. The essential decreased by 39.7% from one year to the next compared to BPA of 68 cents declared during the quarter of the previous year. (Find the latest EPS estimates and surprises on the calendar of Zacks gains.)
Starbucks Corporation, consensus and surprise EPS price
Net income of $ 8.76 billion won the consensual brand of $ 8.79 billion by $ 0.3%. However, the declared value increased by 2.3%, compared to $ 8.56 billion reported in the quarter of the previous year.
Sales of global comparable stores have decreased by 1% from one year to the next. The drawback was due to a decrease of 2% in comparable transactions, partially overshadowed by a 1% increase in average tickets.
During the quarter, Starbucks opened 213 new net stores worldwide, bringing the total number of stores to 40,789 at the end of the quarter.
Starbucks global margin contracts in T2
The company's non -compliant operating margin contracted 460 base points (BPS) at 8.2% compared to the previous year. The decline was mainly due to deterioration and increased labor costs associated with the “Back to Starbucks” initiative. In addition, restructuring expenses linked to the rationalization of its global support organization have also put pressure on the margins.
On a constant currency basis (CC), the non-Gaap operating margin contracted 450 base points from one year to the next.
SBUX segmental details
Starbucks has three operational segments to declare: the development of North America, international and channels.
North America: Segmental net income was $ 6.47 billion, up 1% from one year to the next. Sales of comparable stores in the segment decreased by 1% compared to a 3% drop declared in the quarter of the previous year. Average transactions decreased by 4%, while the variation in tickets increased by 3% from one year to the next.
The operating margin contracted 640 base points at 11.6% against 18% in the quarter of the previous year. Our model expected that the exploitation margin of this segment is 13.4% during the quarter.
International: The net revenues of this segment of $ 1.87 billion increased by 6% from one year to the next. Sales of comparable stores increased by 2% compared to a 6% drop declared in the quarter of the previous year. Average transactions increased by 3%, while the variation in tickets dropped by 1% from one year to the next.
The operating margin contracted 170 bps from one year on the other to 11.6%. The drawback was due to increased promotional activity and restructuring expenses linked to the rationalization of the World Support Organization. These pressures were partially offset by the advantages of the lever effect. We expected this metric to be 10% during the quarter.
In the second tax quarter, the Comps in China were stable compared to an 11% drop reported in the quarter of the previous year. Transactions increased by 4%, while the variation in tickets dropped by 4% from one year to the next.
Channel development: The net revenues of the segment fell by 2% from one year to the next to $ 409 million. The lamentable performance was due to a drop in contributions in the Global Coffee Alliance.
The operating margin of the segment contracted 440 BPS from one year on the other to 47.3%. Higher products of products linked to the Global Coffee Alliance and a decrease in the coverage income of the North American Café partnership caused the drawback. We expected the operating room to be 40% during the quarter.
SBUX's financial details
The company ended in the second tax quarter with cash and cash equivalents of $ 2.67 billion, compared to $ 3.29 billion at the financial year 2024. On March 30, 2025, long -term debt totaled $ 13.3 billion, compared to $ 14.3 billion in September 29, 2024. quarter was $ 2.25 billion, compared to $ 1.25 billion since the year 2024.
Meanwhile, management declared a quarterly 61 cents quarterly species dividend. The dividend is payable on May 30, 2025 to its record shareholders on May 16, 2025 on May 16.
Sbux's Zacks Rank
Starbucks currently offers a Zacks Rank # 3 (Hold).
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