Starbucks Q2 Earnings and Revenues Miss Estimates Starbucks, First Watch Restaurant Group, Inc. by https://www.benzinga.com/
AI Insights:
Simple Explanation:
Starbucks did not make as much money or profit as people thought they would in the last three months. They also didn't sell as many things as expected. Another company, First Watch Restaurant Group, is doing better than people thought and might make more money soon. Read from source...
Critical Perspective:
1. The article title is misleading and sensationalized. It implies that Starbucks Q2 earnings and revenues were expected to be higher than the actual results, but it does not provide any context or comparison with previous quarters or industry benchmarks. A more accurate title would be "Starbucks Q2 Earnings and Revenues: Missing Estimates or Meeting Challenges?"
Investment Analysis:
We are not financial advisors. It's always essential for you to consult with a financial advisor and do your research before making any decisions about investments.
- Starbucks Corporation (SBUX) reported Q2 earnings per share of $0.63, missing the Zacks Consensus Estimate of $0.74 by 15.5%. Revenues came in at $8.1 billion, up 3.8% year over year and falling short of our consensus estimate of $8.29 billion by 1.1%. The company reported a year-over-year decline in same-store sales growth for both the U.S. and China segments, with negative impacts from COVID-19 restrictions and supply chain disruptions. However, Starbucks saw strong digital channel growth and loyalty program engagement during the quarter.
- First Watch Restaurant Group, Inc. (FWRG) is expected to report Q2 earnings per share of $0.37, up 45.1% from the year-ago quarter. The company has a Zacks Rank #1 (Strong Buy) and an Earnings ESP of +9.8%, suggesting a favorable combination of factors for beating expectations. First Watch is a fast-casual restaurant chain that specializes in breakfast, brunch, and lunch items. It has been benefiting from the growing demand for healthier food options and strong comparable store sales growth. The company also has a robust franchise development pipeline and plans to open 25 new restaurants this year.
- Based on the above analysis, I recommend buying shares of First Watch Restaurant Group, Inc. before its Q2 earnings release, as it is likely to beat estimates and deliver strong growth. Starbucks, on the other hand, may face some headwinds from the COVID-19 situation and supply chain issues, which could weigh on its stock price in the near term. Therefore, I advise selling or avoiding Starbucks shares until further notice.