Starbucks warned earnings growth in the 2020 financial year will come in below its forecasts, sending shares down nearly 5 per cent in premarket trade.
Patrick Grismer, chief financial officer, in a presentation at a retailing conference hosted by Goldman Sachs, said adjusted earnings growth in the upcoming financial year would probably be below the company’s longer-term target of 10 per cent.
That compares with a previous
forecast, provided at the company’s investor day last December, for growth of “at least” 13 per cent in the 2020 financial year.
Factors including a one-time tax benefit and the pulling forward of share repurchases that are supporting earnings in the 2019 financial year will not be around in 2020.
Mr Grismer said the company’s operating growth model remained “intact”, though.
The company revealed in July that like-for-like sales during its third quarter — from the start of April to the end of June — rose 6 per cent from a year earlier, the highest quarterly figure since 2016, boosted by solid growth in the Americas, China and Asia Pacific.
That prompted Starbucks to upgrade its outlook for the 2019 financial year — a forecast it reaffirmed on Wednesday. Adjusted earnings would grow about 16 per cent to a range of $2.80 to $2.82 a share for the current financial year ending September 30.
Shares fell as much as 4.9 per cent in pre-market trade, before trimming declines to be down 3.2 per cent. They closed at a record $99.11 in July and are up 50.3 per cent so far in 2019.
