Starbucks (NASDAQ: SBUX) released its full-year 2024 financial results, showing a mix of steady revenue but declining profitability. Here’s a detailed look at the numbers and the company’s outlook.
Key Financial Highlights:
Revenue: $36.2 billion, remaining flat compared to FY 2023, in line with analysts’ expectations.
Net Income: Declined by 8.8% to $3.76 billion, indicating challenges in maintaining profitability.
Profit Margin: Decreased to 10%, down from 12% the previous year, reflecting higher costs or pricing pressures.
Earnings Per Share (EPS): Came in at $3.31, a 4.7% miss against analyst expectations and a drop from $3.60 in FY 2023.
Financial Trends & Forecasts:
Growth Forecast: Starbucks anticipates an annual revenue growth rate of 7.3% over the next three years, a bit lower than the industry average growth forecast of 9.5% for the US hospitality sector. This suggests that Starbucks may face competitive or operational hurdles in achieving growth parity with industry peers.
Stock Performance: Starbucks' share price has been relatively stable, showing little movement over the past week despite the earnings miss.
Analysis Summary:
Starbucks’ flat revenue but lower earnings point to pressures in the company’s cost structure or pricing power, potentially impacted by economic conditions or internal factors. The revenue growth forecast indicates a slower pace relative to the industry, which may require strategic adjustments.
Key Financial Highlights:
Revenue: $36.2 billion, remaining flat compared to FY 2023, in line with analysts’ expectations.
Net Income: Declined by 8.8% to $3.76 billion, indicating challenges in maintaining profitability.
Profit Margin: Decreased to 10%, down from 12% the previous year, reflecting higher costs or pricing pressures.
Earnings Per Share (EPS): Came in at $3.31, a 4.7% miss against analyst expectations and a drop from $3.60 in FY 2023.
Financial Trends & Forecasts:
Growth Forecast: Starbucks anticipates an annual revenue growth rate of 7.3% over the next three years, a bit lower than the industry average growth forecast of 9.5% for the US hospitality sector. This suggests that Starbucks may face competitive or operational hurdles in achieving growth parity with industry peers.
Stock Performance: Starbucks' share price has been relatively stable, showing little movement over the past week despite the earnings miss.
Analysis Summary:
Starbucks’ flat revenue but lower earnings point to pressures in the company’s cost structure or pricing power, potentially impacted by economic conditions or internal factors. The revenue growth forecast indicates a slower pace relative to the industry, which may require strategic adjustments.