Alsea SAB de CV Reports Q1 Earnings Highlights
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy SBUX?
Source: Yahoo Finance
- Sales Growth: Alsea SAB de CV reported a 1.4% year-over-year increase in total sales for Q1, reaching 20.1 billion pesos, with a 5.8% increase when excluding foreign exchange effects, indicating effective expansion strategies in high-return locations and formats.
- Same-Store Sales Performance: Same-store sales grew by 4.1%, with notable contributions from Starbucks in South America and Domino's Pizza in Colombia, reflecting the company's strengthening brand influence and customer loyalty in specific markets.
- Digital Transformation: Digital platforms significantly contributed to growth, with loyalty sales increasing by 12% and digital orders accounting for 41.2% of total sales, demonstrating the company's ongoing efforts to enhance customer experience and operational efficiency.
- Net Income Decline: Despite sales growth, net income for the first quarter decreased by 65.7% year-over-year, primarily impacted by a one-off effect from debt refinancing, highlighting challenges in financial management and cost control.
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Analyst Views on SBUX
Wall Street analysts forecast SBUX stock price to fall
21 Analyst Rating
12 Buy
7 Hold
2 Sell
Moderate Buy
Current: 97.280
Low
59.00
Averages
96.12
High
115.00
Current: 97.280
Low
59.00
Averages
96.12
High
115.00
About SBUX
Starbucks Corporations is a roaster, marketer, and retailer of specialty coffee globally. Its North America segment includes the United States and Canada. Its International segment includes China, Japan, Asia Pacific, Europe, Middle East and Africa, Latin America, and the Caribbean. Its North America and International segments include both Company-operated and licensed stores. The Channel Development segment includes roasted whole bean and ground coffees, Starbucks-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino and Starbucks Doubleshot, foodservice products, and other branded products sold outside the Company-operated and licensed stores. A large portion of its Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestle, while its global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba, Nestle, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Customer Traffic Increase: According to Placer.ai data, average visits per Starbucks location rose by 5.9% in the quarter, with increased customer traffic across all income cohorts, demonstrating the effectiveness of the 'Back to Starbucks' strategy in enhancing customer satisfaction.
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- Same-Store Sales Performance: Same-store sales grew by 4.1%, with notable contributions from Starbucks in South America and Domino's Pizza in Colombia, reflecting the company's strengthening brand influence and customer loyalty in specific markets.
- Digital Transformation: Digital platforms significantly contributed to growth, with loyalty sales increasing by 12% and digital orders accounting for 41.2% of total sales, demonstrating the company's ongoing efforts to enhance customer experience and operational efficiency.
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- Upgraded Performance Outlook: Starbucks raised its annual global same-store sales growth forecast to over 5%, exceeding the previous expectation of at least 3%, indicating strong consumer demand and significant operational improvements, reflecting the early success of CEO Brian Niccol's turnaround plan.
- Customer Traffic Increase: According to Placer.ai data, average visits per Starbucks location rose by 5.9% in the quarter, with increased customer traffic across all income cohorts, demonstrating the effectiveness of the 'Back to Starbucks' strategy in enhancing customer satisfaction.
- Diminished Economic Impact: Despite ongoing economic uncertainty, Starbucks continues to see positive sales trends through April, with analysts noting a strong consumer appetite for trendy innovations, even lower-income consumers are re-engaging, viewing Starbucks as a well-deserved splurge.
- Positive Market Reaction: Following the quarterly results, at least five brokerages raised their price targets on Starbucks stock, which has gained approximately 15.5% year-to-date, with a current 12-month forward price-to-earnings ratio of 36.08, reflecting market confidence in its future growth.
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- Sales Growth: Alsea SAB de CV reported a 1.4% year-over-year increase in total sales for Q1, reaching 20.1 billion pesos, with a 5.8% increase when excluding foreign exchange effects, indicating effective expansion strategies in high-return locations and formats.
- Same-Store Sales Performance: Same-store sales grew by 4.1%, with notable contributions from Starbucks in South America and Domino's Pizza in Colombia, reflecting the company's strengthening brand influence and customer loyalty in specific markets.
- Digital Transformation: Digital platforms significantly contributed to growth, with loyalty sales increasing by 12% and digital orders accounting for 41.2% of total sales, demonstrating the company's ongoing efforts to enhance customer experience and operational efficiency.
- Net Income Decline: Despite sales growth, net income for the first quarter decreased by 65.7% year-over-year, primarily impacted by a one-off effect from debt refinancing, highlighting challenges in financial management and cost control.
See More
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- Fed Policy Influence: The Federal Reserve kept the federal funds rate unchanged at 3.50% to 3.75% during its latest meeting, despite dissent from four members against easing bias, reflecting concerns over economic uncertainty that may dampen investor confidence.
- Strong Tech Stock Performance: The Nasdaq 100 index rose 0.58%, driven by strong earnings from NXP Semiconductors and Seagate Technology, with shares up 25% and over 10% respectively, indicating robust demand for AI infrastructure.
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See More
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- Margin Pressure: Despite strong sales growth, Starbucks faces margin pressure primarily due to Niccol's over $500 million investment in additional staffing, a strategy aimed at enhancing customer experience, which may impact profitability in the short term.
- Market Confidence Fluctuations: Analysts note that while Starbucks has an optimistic sales outlook, the weaker expectations for profit growth have led to a decline in buy recommendations for its stock from over half two years ago to less than four in ten today, reflecting concerns about future profitability.
- Customer Traffic Recovery: Management reported increased customer traffic across all income cohorts, indicating that Niccol's
See More
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- Intensified Market Competition: The price war initiated by domestic players like Luckin Coffee and Cotti Coffee is forcing global coffee chains to adjust their strategies, impacting market share and profitability.
- Peet's Coffee Expansion Plan: Peet's Coffee plans to open about 60 new stores in China, focusing on central cities like Wuhan, Xi’an, Chengdu, and Zhengzhou, aiming for a higher market positioning with an average customer spend of around 50 yuan.
- Starbucks Strategic Shift: After selling a 60% stake in its China business to Boyu Capital at a valuation of approximately $5.2 billion, Starbucks is pursuing a
See More
