Friday's Headlines: Starbucks Beats Earnings as Customers Spend More on Pricy Drinks
Here were the biggest movers in the MyWallSt shortlist this week:
Moving Up ⬆️
StoneCo (STNE) +18.4%
Huazhu Hotels Group (HTHT) +18.2%
Peloton Interactive (PTON) +16.6%
Trip.com Group (TCOM) +16.2%
Wynn Resorts (WYNN) +14.0%
Moving Down ⬇️
Airbnb (ABNB) -20.1%
Evolent Health (EVH) -19.7%
Trex (TREX) -19.0%
Upstart Holdings (UPST) -16.5%
Starbucks Beats Earnings as Customers Spend More on Pricy Drinks ☕
On the backs of iced coffees and Pumpkin Spice Lattes, Starbucks once again rode to glory in its Q4 earnings. Despite consumers pinching pennies, the coffee chain was able to beat analyst estimates across the board. Revenue came in at $8.41 billion compared to $8.31 billion expected, while earnings were 81 cents a share vs. 72 cents expected. Revenue was up 3.3% year-over-year.
But that wasn’t the only good news.
According to Chief Financial Officer Rachel Ruggeri:
“Despite elevated pricing actions taken throughout the year, daily store traffic in the U.S. reached approximately 95% pre-pandemic levels in September fueled by the wildly successful fall promotion.”
Other metrics looked healthy as well. Global same-store sales increased by 7% while sales in the United States were up 11%. Much of this growth was fueled by consumers spending more on average and a slight increase in foot traffic.
Interestingly, cold beverages accounted for more than three-quarters of drinks sold in the US. While Pumpkin Spice items were back with a vengeance with sales climbing 70% year-over-year.
Starbucks’ stock is up more than 3% in pre-market trading.
Shares of Twilio Plunge on Weak Guidance ☎️
Shares of Twilio are down over 26% this morning after the company posted quarterly results that disappointed investors and suggested tough times moving forward.
The communications company posted revenue of $983 million — up 33% year-over-year. The company also posted an adjusted loss of 27 cents per share, which was better than analysts had expected. Those results came as the company added 30,000 active customers compared to the same period last year.
However, investors were spooked by the company’s forward looking guidance. For the fourth quarter, management says they expect between $998 million and $1.05 billion in sales. That was below average analyst estimates of $1.07 billion. On the bottom line, they expect a loss of between 6 and 11 cents per share.
“Like many companies, we are facing some short-term headwinds, but the long-term opportunity remains strong as companies continue building their customer engagement strategies, become more efficient, and aim to build better and more personalized relationships with their customers,” CEO and co-founder Jeff Lawson said in a statement.
In September, Twillio announced it was laying off 11% of its global workforce in order to better position the company as it strives towards profitability.
Shares of PayPal Fall After Poor Earnings 💳
Shares of PayPal are under pressure this morning after the company announced soft guidance for the coming quarter.
The digital payments giant posted third quarter earnings last night that saw them beat estimates on both the top and bottom line. Revenue for the company came in at $6.85 billion, up 11% year-over-year. Adjusted earnings for the quarter were $1.08 per share.
Total payments volume was up 14% on a constant currency basis. The company added 2.9 million new active accounts and transactions per active account were up 13%.
However, the company admitted that new active accounts for the year may fall below its previous guidance and warned that they didn’t expect revenue for the fourth quarter to meet analyst estimates. Management says they now expect revenue for this quarter to come in at around $7.38 billion versus $7.74 expected.
The company said that it is working closely with Apple to expand the use cases for its PayPal and Venmo products. From next year, iPhone users will be able to add PayPal or Venmo-branded debit and credit cards to their Apple Wallet and use them anywhere that Apple Pay is accepted.
Shares of PayPal are down 60% year-to-date.