Starbucks reports in-line Q3 earnings as sales miss on China weakness; shares up By Investing.com

Investing.com – Starbucks Corp reported mixed third-quarter results on Tuesday, with earnings matching Wall Street estimates while revenue fell short of expectations due to weak sales in China.

Shares of Starbucks Inc. (NASDAQ:) rose more than 2% in premarket trading on Wednesday.

Starbucks earned $0.93 on revenue of $9.1 billion. Analysts polled by Investing.com expected earnings per share of $0.93 cents on revenue of $9.25 billion.

The revenue decline comes amid economic weakness in China, a key market segment for the company, which continues to weigh on spending.

Global comparable store sales fell 3%, missing expectations for a 2.7% decline.

Comparable-store sales in North America fell 2%, although the weakness was offset by higher prices.

Comparable-store sales in China fell 14%, driven by a 7% decline in both average ticket and comparable transactions.

Following the report, KeyBanc Capital Markets analysts lowered their estimates for Starbucks’ earnings per share for fiscal 2024 and 2025 to $3.53 and $3.93, respectively, “to reflect slightly lower growth” in comparable sales in the near term.

Analysts maintained a sector weight rating on the stock, noting that they “believe the stock’s current valuation of 21.5x FY24 EPS fairly balances NT’s uncertainty with its potential to return to sustainable growth over the long term.”

Meanwhile, analysts at TD Cowen said SPUX is “embracing new ways to value its stock including newly identified SG&A savings and first recognition of exploring strategic alternatives for its China business.”

Analysts reiterated a “hold” rating and a price target of $81 per share, as they “do not expect this trajectory to lead to multiple expansion.”

Yassin Ibrahim contributed to this report.