Starbucks Earnings: China Could Be the Next Revenue Driver
Starbucks Corp. (SBUX) - Get Report is expected to reports earnings after the closing bell on Thursday. Confidence has wavered on the potential for Starbucks' sales growth in the U.S. as the Seattle-based coffee giant seems to be topping out in terms of capturing the market for coffee and breakfast spending. China, however, is Starbucks' next big revenue driver as investments in potentially 3,000 new store locations and population growth could help Starbucks expand successfully in the region. But here's the catch: Recent reports have indicated the Chinese economy may be slowing. Therefore, for the short-term we may see disappointing revenue in China for Starbucks in the third quarter.
If China sales do disappoint, don't allow U.S. sales to fall by the wayside. Starbucks has increased its promotional activity, which could boost sales. "Increased promotional tactics should deliver 3% Americas comps," Cowen & Co. analyst Andrew Charles wrote in a pre-earnings note. Many investors are expecting 2%-3% growth, but the promotions could see sales through to the higher end of that estimate.
Analysts are expecting Starbucks to post earnings of 60 cents a share on revenue of $6.27 billion.
Apple Leans On Its Lower-Priced iPhone XR
Tech giant Apple Inc. (AAPL) - Get Report also reports earnings after the closing bell. Analysts expect earnings of $2.78 a share on revenue of $61.45 billion. One of the major items to watch for, of course, is the average selling price for the iPhone. Apple may be leaning more heavily on its lower-priced XR model, as sales of the more expensive XS phone are reportedly off to a rough start since the launched. Will Apple sell enough XR models to meet revenue estimates?
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