Starbucks’ stock jumps on strong US and China sales growth

Kevin Johnson, CEO, Starbucks

Scott Mlyn | CNBC

Starbucks will report earnings after the bell Wednesday.

The coffee chain’s stock, valued at $100 billion, is up 29% so far this year.

Here’s what analysts surveyed by Refinitiv are expecting:

  • Earnings per share: 70 cents expected
  • Revenue: $6.68 billion expected
  • Global same-store sales: 3.95%

Investors will be watching to see if Starbucks’ Nitro cold brew lifted U.S. sales during its fiscal fourth quarter. Executives said last quarter that the drink was on track to be in all locations nationwide by the end of fiscal 2019.

The company recently announced that it would expand its U.S. delivery to five new markets through its partnership with UberEats. Starbucks is aiming to have nationwide delivery available by early 2020. 

In China, its second largest market, the coffee chain’s delivery business, through a partnership with Alibaba, is much further along. But Starbucks is facing increased competition there. Luckin Coffee, which has smaller format stores and quick delivery, has been trying to catch up with its Seattle-based competitor by rapidly opening new locations and heavily discounting its drinks. 

In September, Starbucks said that it expects fiscal 2020 earnings to be below its “ongoing growth model of 10%.” CFO Pat Grismer said that one-time tax benefits realized in fiscal 2019 would be a headwind and that Starbucks bought back $2 billion worth of shares earlier than originally planned.

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