SBUX still a buy despite Q2 miss

Starbucks Corporation (SBUX) recently reported its Q2 earnings, which missed analysts’ expectations. Despite this, the coffee giant remains a solid buy for investors.

The company reported earnings per share of $0.62, missing the consensus estimate of $0.68. Revenue also fell short of expectations, coming in at $6.67 billion compared to the expected $6.81 billion. The miss was attributed to the ongoing pandemic, which has impacted the company’s sales and operations.

However, there are several reasons why SBUX remains a buy for investors. Firstly, the company has a strong brand and loyal customer base. Starbucks has built a reputation for quality coffee and a welcoming atmosphere, which has helped it to weather the pandemic better than many other businesses.

Secondly, the company has a solid growth strategy. Starbucks plans to open 22,000 new stores globally by 2030, with a focus on expanding in China and other emerging markets. This will help to drive revenue growth and increase the company’s market share.

Thirdly, Starbucks has a strong digital presence. The company’s mobile app has over 22 million active users, and the company has been investing heavily in digital technology to improve the customer experience. This has helped to drive sales during the pandemic, as customers have been able to order and pay for their coffee without leaving their homes.

Finally, Starbucks has a strong balance sheet. The company has a debt-to-equity ratio of just 0.79, indicating that it has a low level of debt relative to its equity. This gives the company flexibility to invest in growth opportunities and weather any future economic downturns.

In conclusion, while Starbucks’ Q2 earnings may have missed expectations, the company remains a solid buy for investors. With a strong brand, solid growth strategy, strong digital presence, and a healthy balance sheet, Starbucks is well-positioned to continue delivering value to shareholders in the years ahead.