Starbucks (SBUX) CEO Schultz on CNBC: 'This Quarter Was an Anomaly'
NEW YORK (TheStreet) -- Shares of Starbucks (SBUX) - Get Report are lower by 0.42% to $57.36 on Friday morning, after the company reported uninspiring third-quarter earnings results yesterday. Starbucks posted earnings of 49 cents per share, which met analysts' expectations, however the company's revenue of $5.24 billion came in below estimates of $5.33 billion.
CEO Howard Schultz called the quarter an "anomaly" on CNBCs "Squawk on the Street" this morning.
"There's no doubt that we are navigating through a very unusual time. There is a confluence of social and political turmoil at home, weakening consumer confidence, and clearly increasing global uncertainty," Schultz said.
He noted that even though the current operating environment is "quite different, placing more pressure on us to be more innovative," he does not use it as an excuse and remains bullish on the company's future.
Another point Schultz drove home was the "more fair" new loyalty program. The program is shifting to a spend-based one from a frequency-based one. However, the company made an execution error when rolling out the program.
"We own that and that's why it was an anomaly as this is not only a one-time event, but a one time in a decade event," Schultz said about the change.
Schultz believes the program will be a continued success for the company as millions around the world are signing up.
Finally, Schultz set his sights on Asia, and Starbucks employees.
"We will continue to accelerate business and growth around the world, while decreasing U.S. dependence because of the development and profitability in Asia, specifically China," Schultz said.
As for the employees, "We will continue to invest in our people. Everything we do is experience-based and that experience comes to life with our people," Schultz explained.
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Separately, TheStreet Ratings rates Starbucks as a "Buy" with a ratings score of "B." This is driven by a few notable strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Ratings covers.
The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. TheStreet Ratings feels its strengths outweigh the fact that the company is trading at a premium valuation based on TheStreet Ratings review of its current price compared to such things as earnings and book value.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SBUX