Why SBUX Is Climbing Today

Starbucks (SBUX) is advancing 5% after the company reported stronger-than-expected fiscal first-quarter financial results yesterday after the market closed. However, the firm’s earnings per share, comparable-store sales and number of total transactions at comparable stores did fall significantly versus the same period a year earlier.

A Look at Starbucks’ Q1 Results

Starbucks’ Q1 EPS fell 23% year-over-year to 69 cents. However, the latter figure was above analysts’ average estimate of 67 cents. It generated revenue of $9.4 billion, little changed versus the same period a year earlier and $90 million above analysts’ mean outlook. Meanwhile, its comparable sales dipped 4% YOY and the number of its transactions at comparable stores sank 6% YOY.

A barista pouring a freshly brewed cup of coffee from a high-end espresso machine.

In the previous quarter, the company’s revenue fell 3% YOY and its comparable store sales tumbled 7% YOY, so its Q1 results did show some signs of improvement.

“While we’re only one quarter into our turnaround, we’re moving quickly to act on the ‘Back to Starbucks’ efforts and we’ve seen a positive response. We believe this is the fundamental change in strategy needed to solve our underlying issues, restore confidence in our brand and return the business to sustainable, long-term growth,” CEO Brian Niccol stated.

Morgan Stanley Is Bullish on SBUX

In a note to investors following the Q1 results, Morgan Stanley asserted that Niccol’s strategies should enable the firm’s sales to climb going forward. The investment bank is upbeat on the shares’ outlook.

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Disclosure: None. This article is originally published at Insider Monkey.