Starbucks: Strong Q1 Earnings and Coronavirus Concerns Boost Volatility
Starbucks (NASDAQ: SBUX) just reported blockbuster growth during its fiscal 2020 first quarter, a strong follow-up to the accelerating results during 2019. Higher numbers were supported by a growing store base and higher comparable-store sales (or comps, a combination of foot traffic and average guest ticket size) in China, as well as a big comps increase in the U.S. that bucked the negative trend in the industry during the last quarter of calendar year 2019.
In spite of the positive report card, I'm holding off on making any more purchases of Starbucks -- for now. The stock already rallied over 15% from its lows registered over the autumn months, and complications from the Wuhan coronavirus in China caused management to remove its sales guidance for the time being. Until there is some clarity, shares could get volatile, which usually means buying opportunity.
The good news is that global comps growth, led by comps increases in the two most important markets -- the U.S. (up 5%) and China (up 3%) -- as well as positive traction in Starbucks' retail division distributed by Nestle, led to across-the-board advances.
Source Fool.com
