Is Starbucks Corp. (SBUX) stock invites to Invest?

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SBUX Stock
SBUX Stock

Starbucks Corp. (NASDAQ: SBUX) saw its stock rise this week as a result of its fiscal 2022 Q2 report. Many investors expected financial performance to deteriorate, yet the outcomes were better than projected.

Starbucks’ revenue increased 15% to a record $7.6 billion in the quarter ending April 3. Despite a partial closure in China, GAAP earnings per share were $0.58. Additionally, the number of Starbucks Rewards members grew by 17% to 26.7 million.

The main driver was an increase in sales in the North American market (+12%), while sales in the international market fell by 8% due to a significant drop in sales in China (-23%). Keep in mind that more than 60% of Starbucks locations are in China or the United States.

Starbucks has continued to grow its business, with 313 new locations added in the latest quarter. The corporation is currently concentrating on expanding its presence in the United States, where the Starbucks brand is well-known and has a strong sales trend.

As a result, investors’ main concerns about a possible sharp reduction in Starbucks sales and losses due to issues in China were unfounded. The American market, on the other hand, is able to compensate for these factors. A more serious issue could be growing costs. Due to inflation, Starbucks boosted its spending on staff wages and bonuses in the second quarter.

As a result, the operating margin dropped to 12.4%, resulting in lower profit growth. At the same time, retention initiatives may yield future rewards. With a labor scarcity, the company will have an easier time filling vacancies as it prepares to expand during the post-COVID-19 recovery period.

Starbucks Corporation’s stock fell -5.10 percent to $77.48 in the most recent trading session. The stock had a trading volume of 19.1 million shares, which was lower than the average daily trading volume of 10.95 million shares for the previous 50 days. Starbucks Corporation’s stock has dropped 1.18 percent in the last five days but has lost -7.89 percent in the last month.

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