Starbucks’ revenue slides 5% in the fiscal first quarter

Written by: Wajeeh Khan
January 27, 2021
  • Starbucks Corporation's revenue slides 5% in the first quarter.
  • The U.S. multinational declares 32.76 pence per share of dividend.
  • Starbucks reports £452.37 million of net income in fiscal Q1.

Starbucks Corporation (NASDAQ: SBUX) said on Tuesday that its revenue in the fiscal first quarter came in weaker than expected. The American multinational, however, earned more than the analysts’ estimates in Q1. Starbuck’s board approved 32.76 pence per share of dividend on Tuesday.

Starbucks shares, that you can learn to buy online here, were reported more than 1.5% down in extended trading on Tuesday. Including the price action, the U.S. company is now trading at £74.85 per share. In comparison, it had tumbled to as low as £41 per share in March 2020 when the COVID-19 crisis pushed its stores into temporarily shutting down.

Starbucks’s Q1 financial results versus analysts’ estimates

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Starbucks said that its net income in the first quarter printed at £452.37 million that translates to 44.35 pence per share. In the same quarter last year, its net income had come in at a higher £643.94 million or 53.80 pence per share.

The chain of coffeehouses said that its revenue saw a 5% year over year decline in the recent quarter to £4.91 billion. Starbucks attributed the decline to the Coronavirus pandemic that weighed on its same-store sales in Q1 both in the U.S. market and overseas. The COVID-19 crisis has so far infected more than 26 million people in the United States and caused over 435 thousand deaths.

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CEO Kevin Johnson’s comments on Tuesday

CEO Kevin Johnson commented on the financial results on Tuesday and said:

“I am very pleased with our start to fiscal 2021, with meaningful, sequential improvements in quarterly financial results despite ongoing business disruption from the pandemic.”

Also on Tuesday, Walgreens Boots Alliance named Rosalind Brewer as its new Chief Executive Officer. Brewer has previously worked at Starbucks as its Chief Operating Officer.

Starbucks also highlighted in its report on Tuesday that same-store sales saw a 5% annualised decline in the United States. Internationally, same-store sales were 3% down in the fiscal first quarter. Sales in Q1 improved 5% on a year over year basis in China. In the prior quarter (Q4), Starbucks had posted a 9% decline in global same-store sales.

Starbucks performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, the Seattle-based company has a market cap of £89.61 billion and a price to earnings ratio of 133.28.