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Starbucks Corporation (SBUX) On Track To Deliver Record Earnings In Q2: Nick Setyan

It was a sigh of relief for Starbucks Corporation (NASDAQ:SBUX) having posted another record quarter at the back of analysts remaining skeptical about a further growth in comps.  During an interview on CNBC, Wedbush Securities analyst, Nick Setyan, reiterated that the ongoing momentum should see the giant food retailer start increasing its food offerings in the U.S. and also on the international front.

Starbucks Corporation (NASDAQ:SBUX)

Starbucks Corporation (NASDAQ:SBUX) continues to attract more customers around the globe seen by total sales growing by 13% to a high of $4.8 billion in the first quarter.

“Expectations was very low there was a lot of caution coming through around the American comps and they were up by 5%. I think we are seeing like a big sigh of relief now because of it, also around the guidance I think FX headwinds were a concern and you ended up beating them. […],” said Mr. Setyan

The current valuation of the stock continues to be a point of concern to a number of investors considering it is at its peak. Setyan, on the other hand, remains confident that the stock could surge even further going forward. The research firm currently has a buy rating on Starbucks Corporation (NASDAQ:SBUX) with a share price target of $90.

Starbucks Corporation (NASDAQ:SBUX) impressive sales as well as improved profit margins have been attributed to operations in Asia where the company continues to gain traction at the back of attracting more customers. Sustainability of operations in these fast growing markets remains key if the company is to continue generating impressive operating margins. The China-Asia Pacific area remains a clear source of future growth considering sales in the last quarter grew by 8% according to Setyan.

Japan is the only concern at the moment in Asia where profit margins have been affected by increased expenses with the company expected to do something about it.

“[…] the momentum is going to continue we haven’t even seen anything yet, those guys even don’t buy coffee in the morning in China afternoon even day part . Once we get Starbucks in their educating about Coffee and themorning  day part expense, you have multiple years of transactions tailwinds ahead of us,” said Mr. Seytan.

Starbucks Corporation (NASDAQ:SBUX) main focus at the, moment especially in international markets is to try and drive sales throughout the day. Instead of having to rely on sales carried out at particular times of the day.

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