Starbucks Corporation (NASDAQ: SBUX) climbed as the opening bell rang on August 3 as the coffeehouse chain reported a strong earnings quarter. During Q3, the firm noted comparable sales in North America rising by 9%, offsetting a 44% drop in China, where Covid restrictions hampered sales.
Furthermore, Starbucks posted revenue of $8.15 billion, an 8.7% year-on-year (YoY) increase, beating estimates by $20 million; similarly, the earnings per share (EPS) were $0.84 beating estimates by $0.08.
Moreover, the firm’s CFO, Rachel Ruggeri, joined CNBC’s Squawk Box to discuss the strong results, stressing that they have ‘an offering that’s worth paying for.’
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“We’re incredibly proud by the demand we’re seeing globally. And what we saw, particularly in this quarter, we had actually record customer counts and record average weekly sales. What that means is, we see more customers connecting with the brand and then more engagement when they come in our stores, and we’re encouraged by that.”
She also added:
“Our customers have a choice to be able to customize, to be able to create these more premium beverages. And what we’ve seen so far is that our demand is strong, and that tells us that we have an offering that’s worth paying for today. But again, it means we have to continue to create the experience to not only bring the customers in but to ensure that they’ll return.”
SBUX chart and analysis
The long-term trend is still neutral, but the short-term trend is positive, with the stock trading between $75.73 and $85.59 over the past month. When compared to the yearly performance of all other stocks, SBUX outperforms 40% of them, but it is still down 28% for the year.
Currently, the support zone is in the range between $83.32 and $84.02, while the resistance area is amidst $88.78 and $88.91.
The investor day that should be held in September will answer additional questions and possibly shed more light on the recovery in China.
Furthermore, a new CEO hire late in 2022 could boost investors’ confidence in the firm, as short-term price volatility may be expected.
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