Starbucks on Tuesday, Agust 1, 2023, reported its financial results for its 13-week fiscal Q3 that ended July 2, 2023. The coffeehouse chain’s quarterly earnings exceeded analysts’ projections but its same-store sale fell short of estimates. Despite a sharp rebound in sales in China, demand in North America and overall international markets has decreased.

“I am pleased with our third quarter performance, which beat our expectations, including our International segment. Our performance was bolstered by the progress we are making against our strategies, specifically our Reinvention Plan, and its unfolding into tangible financial results, as we delivered earnings growth of 19% well above our revenue growth of 12%,” commented the company’s chief financial officer Rachel Ruggeri. “The momentum we have built and strength we are seeing globally, gives us the confidence and optimism to close our fiscal year strong.”

Despite moves to draw in a younger, wealthier clientele in the United States with the launch of new products, quarterly transactions increased by just 1% – a step down from the 6% reported in Q2. Same-store sales in North America grew 7%, missing estimates of 8.4%. The company’s China market, its second-largest market, recorded a sharp recovery from the slump caused by Covid restrictions last year. The increase in comparable store sales internationally can be attributed to the performance of the China market.

“International comparable store sales increased 24%, driven by a 21% increase in comparable transactions and a 2% increase in average ticket; China comparable store sales increased 46%, driven by a 48% increase in comparable transactions and a 1% decline in average ticket,” the report reads in part.

During the earnings call following the release of the report, the company maintained its revenue growth projection of 10% to 12% for the 2023 fiscal year. It raised its adjusted earnings-per-share (EPS) growth outlook from the low end of 15% to 20% to 16% to 17%.

EPS came in at $1 adjusted, higher than the 95 cents expected by Wall Street analysts. Analysts had projected revenue of $9.29 billion, $9.17 billion was reported. Q3’s net income attributable to Starbucks was $1.41 billion, (99 cents per share), up from $912.9 million (79 cents per share) a year earlier.

Starbucks’ operating margin benefited from improved productivity and higher menu prices; it rose to 17.3% from 15.9%. Net sales rose 12% to $9.17 billion, as same-store sales increased by 10%, narrowly missing StreetAccount estimated 11%.

Overall, demand in the domestic market is still strong, with customer traffic growing by 1% in Q3. Further, customers are reportedly buying more breakfast sandwiches with their beverages and paying for more expensive additions like cold foam to their orders.

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American multinational chain of coffeehouses and roastery reserves, Starbucks Corporation (NASDAQ: SBUX) has released its fourth quarter 2022 performance report as revenue slightly misses analyst’s expectations The company said its revenue came in at $8.71 billion, a figure that is down from the $8.78 billion estimated based on analyst’s expectations.

Starbucks remains the coffeehouse of choice for millions of consumers in the United States and around the world. The company posted 75 cents as its Earnings Per Share (EPS), a miss from the consensus estimate of 77 cents.

The firm reported fiscal first-quarter net income of $855.2 million, or 74 cents per share, up from $815.9 million, or 69 cents per share, a year earlier. By a very good margin, Starbucks recorded an impressive growth trend in the United States even though the COVID-19-related outbreak in China, its second-largest market dragged down its performance.

The company’s interim Chief Executive Officer, Howard D. Schultz said the firm recorded a significant growth in the Asian country following the relaxation of its COVID-19 lockdowns. However, took a wrong turn when the country started recording a resurgence in the number of cases following the move.

“With the resurgence has come renewed lockdowns and mobility restrictions pursuant to China’s strict zero COVID policy including in many cities in which we operate, meaningfully reducing traffic in our stores,” Schultz said adding that the company “anticipate the current COVID-related uncertainty to continue and repeat the view we shared on our Q3 call and our Investor Day that while our long-term aspirations for China remain undiminished, we expect the recovery of our business in the country to be nonlinear.”

Starbucks revealed that as many as 1,800 locations in China were under lockdowns, a significant cut of its 6,090 locations in the country.

Starbucks Revenue Forecast

While the currently reported Starbucks revenue dropped below expectations, the company is optimistic that the revenue for the current fiscal year is bound to grow by 10% to 12%. The firm is optimistic its Earnings Per Share will rise by 15% to 20% on the low end.

The company is planning to capitalize on its most active market, the United States. By banking on the growing subscribers to its Loyalty Reward program which topped over 30.4 million, Starbucks maintained a strong backing for its revenue.

Starbucks is known for its innovation in driving customer engagement, a move that has made it secure a partnership with Web 3.0 startup, Polygon. While on his way out of the company as CEO, Schultz teased that an announcement is coming up in February about “an enduring transformative new category” that he discovered while visiting Italy in the past summer.

To him, the category is best described as alchemy. With cost-cutting measures underway, Starbucks is looking to keep up with its growth tracks into the near future. The company’s shares slid 1.77% in the After Hours session to $107.22.

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• Starbucks Odyssey Beta launches on Polygon.

• MATIC is up by 4% today and could rally higher soon.

• The broader crypto market could end the week in a positive tone after underperforming for most of the week. 

Starbucks Odyssey Beta launches on Polygon

The Polygon team announced a few hours ago that Starbucks Odyssey Beta is now live on its network. Polygon explained that the Starbucks Odyssey is an extension of the Starbucks Rewards loyalty program that unlocks access to exciting new benefits and experiences for members. 

This latest cryptocurrency news has seen MATIC performing well over the past few hours. MATIC, the native token of the Polygon ecosystem, is up by more than 4% in the last 24 hours as the broader market recovers.

At press time, the price of Polygon stands at $0.9259, up by more than 4% today. The total cryptocurrency market cap stands above $855 billion, up by nearly 2% in the last 24 hours.

Bitcoin, the world’s leading cryptocurrency by market cap, is up by more than 2% in the last 24 hours and is now trading above $17k for the first time this week.

Key levels to watch

The MATIC/USD 4-hour chart has turned bullish as MATIC has been performing well over the past 24 hours. The technical indicators show that MATIC is coming out of its recent bearish run and could surge higher soon.

The MACD line has crossed into the positive zone, indicating that the bears are currently not in control of the MATIC market. The 14-day RSI of 54 shows that MATIC could be heading to the overbought region if the bullish trend continues.

With the bulls now in charge, MATIC could surge past the $0.9577 resistance level before the end of the day. With the Starbucks news, MATIC could have an extra incentive to move towards the $1 psychological level for the first time this month.

Where to buy Polygon now

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Benzinga has examined the prospects for many investors’ favorite stocks over the past week, here’s a look at some of our top stories. 

The markets rallied this week, breaking a three-week losing streak, following the latest comments from Federal Reserve Chair Jerome Powell suggesting that the Fed will continue to aggressively combat inflation.

All three indices were up for the week, with the S&P 500 gaining 1.82%, the Nasdaq Composite up 1.79% and the Dow Industrials finishing the week 1.09% higher.

Benzinga continues to examine the prospects for many of the stocks most popular with investors. Here are a few of this past week’s most bullish and bearish posts that are worth another look.

The Bulls

“If Cathie Wood Is Correct, A $1,000 Bet On Roku Will Produce An 817% Gain By 2026,” by Chris Katje, notes that even though Roku Inc ROKU shares are down over 80%, Ark Invest, led by Cathie Wood, remains heavily invested in the company.

“Al Gore Bought The Dip On This Bill Gates Company,” by AJ Fabino, details how many shares of Microsoft Corp MSFT were recently purchased by Al Gore’s Generation Investment Management.

“Starbucks Stock Shows Relative Strength To S&P 500: Here’s What To Watch,” by Melanie Schaffer, analyzes the chart for Starbucks Corp SBUX stock, as it gained almost 4% this week, after the company named a new CEO.

For additional bullish calls of the past week, check out the following:

How Important Are Electric Vehicles To Ford? This Exec Says They Can ‘Revive’ Automaker

This New Apple Watch Could Conquer High-End Smartwatch Segment: Gurman

Robinhood Launches Index Of Highest-Conviction Stocks: Here Are The Top 10 Holdings

The Bears

“Trump’s SPAC Partner For Truth Social Deal Faces Setback As Shareholders Reject Time Extension: Report,” by Shanthi Rexaline, reports that Digital World Acquisition Corp DWAC could face the risk of being liquidated after failing to get shareholder support for a year’s extension to complete a SPAC deal with Trump Media & Technology.

In “Jim Cramer Says Stay Away From Dogecoin And Shiba Inu, Making Money In Crypto Doesn’t Mean It’s For Real,” Samyuktha Sriram explains why Jim Cramer is telling investors to avoid cryptos like Dogecoin DOGE/USD and Shiba Inu SHIB/USD.

“Apple Not The ‘Market Leader’ For Smartphones, Says CEO Tim Cook. ‘Facts Don’t Bear You Out,’” by Shivdeep Dhaliwal, looks at Apple Inc AAPL CEO Tim Cook’s acknowledgement that the iPhone maker faces fierce competition.

For more bearish takes, be sure to see these posts:

Was Bed Bath & Beyond A ‘Pump And Dump’? Ryan Cohen, Deceased CFO Named In Shareholder Lawsuit

Ethereum And Dogecoin Mark Cuban Says Crypto Is Boring Now

Famous Nikola Rolling Down The Hill Video Will Be Part Of Trevor Milton Trial

Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter.

Gucci, the iconic Italian fashion house, plans to accept digital tokens — Bitcoin, Bitcoin Cash, Ether, Dogecoin, Litecoin, Shiba Inu, and several stablecoins — in select U.S. stores at the end of May.  

In-Store Payments

Gucci will allow in-store crypto payments via an email sent to the customer.  This email contains a QR code that allows them to execute the payment from their crypto wallet.

Previously, Gucci had released an NFT collection called Supergucci as a partnership with animation studio Superplastic and an NFT collection called 10KTF Gucci Grail inspired by Alessandro Michele, Gucci’s new creative director .  

Meanwhile, Starbucks, the gourmet coffee giant with 32,000 stories in 80 nations, is launching NFT collections to “allow for access to exclusive experiences and perks.” Translation: the company wants to use nonfungible tokens to strengthen its loyalty programs, a function that’s attracting attention from corporate marketing departments and investors.

Chain Agnostic

Playing off the idea that customers work in Starbucks shops in addition to offices and residences, Starbucks is dubbing its foray into blockchain as The Digital Third Place.  The team plans to create NFT collections based around coffee-related art.

Starbucks’s approach will “likely be multi-chain or chain agnostic […] and will certainly start collections backed by blockchains and infrastructure that is consistent with our multi-decade commitment to sustainability,” according to its press release.  

Apple CEO Tim Cook spoke publicly about antitrust regulation, Shibu Inu stock is up after being added to Robinhood’s platform, and Starbucks is under pressure after being downgraded by Citi.

Video Transcript

– Welcome back to Yahoo Finance Live, everyone. It is time for our triple play, the three tickers that we’re watching today that caught our eye for one reason or another. So we’re going to start with me. My pick is Shiba Inu. The ticker symbol SHIB-USD. Now, this meme crypto token was soaring this afternoon before dialing back slightly, as you can see. It’s still up about 10% at the moment.

Now, this was after it was included as one of as one of four new cryptocurrencies on Robinhood’s platform. And that was along with Solana, Polygon’s Matic, and Compound’s COMP Comp. Now, Shiba is yet another example of a meme coin which typically does tend to appeal to retail consumers. But as we saw the rise of Dogecoin, once you get the blessing from someone like an Elon Musk, that does get taken more seriously. A lot of people are wondering if that might be the difference here with Robinhood.

Now, obviously, Shiba was still down year to date, though. But Robinhood shares also got a bump today on that news. While more broadly, other cryptos, except for Bitcoin, seeing some green today. But still a little bit on the struggle bus as well.

– Yeah. And this is the key for any new coin that gets added to some of the major exchanges, whether it be Coinbase, whether it be Robinhood and the amount of sales that we do see, or at least the new players that decide to get into the crypto space, either via Robinhood or one of the other platforms that I mentioned a moment ago, is for these coins, it just adds more of the viability for them. If they’re getting picked up by a major exchange, then, ultimately, you see this type of price action on that day of the announcement.

Interesting to note, though, that Shiba still well off of some of the highs that it had seen in late 2021. So we’ll see if it gets back to those levels. But as of right now, this no doubt a good move, not just for the price action, but additionally for having more of that viability as a coin. And we’ll see exactly how that creates even more demand for more coins to be added as well through Robinhood’s platform.

Story continues

Also, another ticker symbol that I’m tracking here on the day is AAPL. It’s a very common one for our viewers here. And this is as Tim Cook spoke today in Washington, DC with the International Association of Privacy Professionals and really reiterated the Apple App Store privacy pillar here or pitch that they’ve continued to go out to consumers with over the past several years, saying that Apple is deeply concerned about app stores that essentially would quote, unquote, “circumvent the Apple App Store.”

And they’re afraid that there would be potential risk or exposure that users would see because of some of the hungry companies that are trying to get their data. And that is something that Apple has created a entire marketing engine out of is the privacy play, and asking for regulation, but asking it to be regulation that, to no surprise, also benefits them at the end of the day.

So it’ll be interesting to see where Washington and some of the broader tech lash and looking under the hood with regard to the antitrust and the monopolies that some of these companies seemingly hold over consumer data, where that continues to kind of break up the availability for Apple to just sell further into that install base and also kind of be a detractor for some of those other smaller players that are looking to monetize those users via the App Store as well.

– Yeah. As usual, I think the answer lies somewhere in the middle. Certainly, he’s right about privacy concerns. And they have been leaders on that front, as you know, Brad. I mean, put their money where their mouth is late last year and really hurt the ad revenue over there at Facebook making those changes in particular to the iPhone. But I think those app developers have a great point. If they met somewhere in the middle, that 30% fee for people like Epic Games is going to continue to be a thorn.

And it’s going to continue to focus that lawsuit. So it sounds like the UK, they’re going to get a deal. The US is where they have all eyes. And they need some sort of middle ground to help out those app developers so they don’t take that side door. My play is Starbucks. SBUX. Citi downgrading the stock to a neutral buy, citing several concerns. Analyst John Tower said broader inflation, management issues, China COVID lockdowns, and of course, the unionization push is the reason for that downgrade to neutral rating on Tuesday.

Speaking of the unionization drive, in Boston, two Boston stores became the first two in Massachusetts to unionize. And they are batting near 1.000 right now. 18 of 19 when that has come up for a vote at last check. As for the stock, it is down just a bit. About 1% on the day. Year to date it’s been hammered. Down 31%. And guys, I want to get your take on some reporting from the “New York Post” that Howard Schultz at a California store that was attempting to unionize reportedly said to a store worker, if you hate Starbucks so much, why don’t you go somewhere else?

Now, context, this comes from a very pro-union news site. More perfect union. Schultz responded. He’s the interim now current CEO. He’s back again. He offered a statement, but didn’t really explain whether or not he said that. I think it’s rather inconsequential whether he said it or not. If he did, it seems relatively on brand and innocuous. Not sure how you feel about it, Brad.

– It’s interesting because Howard Schultz coming back to Starbucks at a time where this is a very different green siren than the one that he left and turned over to Kevin Johnson previously. And so as of right now, with all of the labor shortages and labor issues that they are confronting, both on the union side, but also in just being able to retain employees in the face of hourly employment that can be– they can see payment far better at other places.

It all depends upon how they’re working with that existing labor and workforce and those team members that they have done so much over the years to try and create this compelling and competitive positioning to be employed at Starbucks versus other places through some of the benefits as well. And so now if you have an intermediary on one case that you have to continue to interface with on the union side, how does that change up some of the benefits in other places that they’re able to offer as well?

But I think for Howard Schultz, it also comes with the recognition that at the end of the day, you have to know some of the headwinds that you’re facing as a company. And of course, he does know that. But this just doesn’t sound great on headline, of course, right now in that interfacing, in this interaction at least. But we’ll continue to track shares of SBUX going into the end of the trading session.