Starbucks (SBUX) Stock Retreating in After-Hours Trading on Q3 Revenue Miss

Starbucks (SBUX) stock is down in after-hours trading on Thursday, even though it reported record-high earnings per share and revenues for the fiscal 2016 third quarter.
By Natalie Walters ,

NEW YORK (TheStreet) -- Shares of Starbucks (SBUX) - Get Report are retreating 3.35% to $55.67 in after-hours trading on Thursday after reporting fiscal 2016 third-quarter revenues that missed analysts' estimates and in-line earnings.

After the market close, the Seattle-based coffeehouse reported that revenue increased 7% year-over-year to $5.2 billion in the most recent period but missed analysts' projections of $5.3 billion.

The company reported adjusted earnings of 49 cents per share, which met analysts' estimates and increased 17% from last year.

Additionally, Starbucks missed analysts' same-store sales growth estimates. The company reported 4% growth, compared to Wall Street expectations of 5.7% growth, reports CNBC. 

But CEO Howard Schultz said he is hopeful about the fourth quarter: "As we enter Q4 and approach fiscal 2017, we have clear line of sight to returning our U.S. business to historic levels of comp sales growth which had been at or above 5% for the 25 consecutive quarters prior to Q3."

(Starbucks is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)

Separately, 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. TheStreet Ratings has this to say about the recommendation:

We rate STARBUCKS CORP as a Buy with a ratings score of B. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

You can view the full analysis from the report here: SBUX

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