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TheStreet Open House

Starbucks Cools Down but It's Still Hot

Stocks in this article: SBUX

NEW YORK ( TheStreet) -- Hope deferred makes the heart sick. That's why it often doesn't pay to overestimate the earnings results of great companies like Starbucks (SBUX - Get Report). It's hard for even this iconic brand to have a perfect quarter.

That said, the company's latest earnings were still pretty darn good. I was hoping for slightly worse revenue and earnings-per-share numbers from SBUX. Why, you might ask? Because I wanted the stock to go on sale.

SBUX closed Thursday down slightly at $73.39 but rose in after-hours trading. Based on that reaction I'll have to keep waiting for a much lower entry price. Meanwhile, some analysts have given the stock a one-year price target of close to $90 a share.

Starbucks reported that its fiscal first-quarter revenue improved by 12% to an all-time record of $4.2 billion for a single quarter. Yet, lo and behold, it wasn't quite good enough to match the nearly $4.3 billion that analysts had been expecting.

My colleague Keris Alison Lahiff served up a nice synopsis of SBUX's quarter in a recent article on the company's first quarter. The good news is the company exceeded analysts' EPS projections by 2 cents to 71 cents per share, a nearly a 25% improvement over the EPS from the year-ago quarter.

No one was heartsick over that improvement, and CEO Howard Schultz told those listening to the earnings conference that "Holiday 2013 was the first in which many traditional brick and mortar retailers experienced in-store foot traffic give way to online shopping in a major way."

The company's combination of physical and digital assets, he continued, "positions us as one of the very few consumer brands with a national and global footprint to benefit from the seismic shift underway."

Now is a good time to see where the share price of SBUX has traveled over the past five years and present a chart that highlights some of the drivers one might expect would be most responsible for the stock's stellar performance.

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