Starbucks Corporation (NASDAQ:SBUX) is one of the stocks that has remained resilient despite the company’s core business coming under pressure amid lockdown restrictions and the shut-down of locations due to demonstration fears. The coffee giant has been on an impressive run ever since it bottomed out from one-year lows in March of last year.
Starbucks Rally
A 40% plus rally from March lows all but affirms the stock’s solid performance at a time when most retail outlets are being clobbered in the market. Likewise, the first-quarter earnings report is poised to provide further clarification as to whether the stock will continue edging higher after a recent spike to record highs.
The coffee giant posted earnings that beat expectations in the most recent quarter as the outlet benefited from a faster than expected recovery from COVID-19. In the fourth quarter, the company earned 51 cents a share, nearly double 33 cents projected by analysts. However, revenues at the time were down by 8% to $6.2 billion, mostly hurt by a decline in same store sales in China.
Starbuck Q1 Estimates
Fats forward, Starbucks is poised to report its first-quarter earnings report that could help paint a clear picture of the health of the business amid the COVID-19 pandemic. Analysts expect the company to post a 30% year over year decline in earnings that should come in at 55 cents but slightly higher than Q4 levels.
Likewise, revenues are expected at $6.9 billion, suggesting a 3.1% year over year decline. While the coffee giant did report that it was witnessing a recovery in operations, the first-quarter top line is likely to decline due to store closures in the quarter compounded by reduced operating hours and dismal customer traffic.
Similarly, heightened competition within the coffee segment is also believed to have taken a significant toll on the company’s operations. Amid the tailwinds, Starbucks is believed to have benefited from the robust drive-thru and robust delivery options.