Starbucks ETFs Gain on Q2 Earnings Despite Coronavirus Crisis

Starbucks Corporation SBUX released second-quarter fiscal 2020 results, after market close on Apr 28. The company’s earnings and revenues topped estimates. However, both the metrics declined sharply year over year, largely due to the coronavirus pandemic. Notably, shares of Starbucks have declined 2.3% since the earnings release.

Earnings in Focus

Starbucks reported adjusted earnings of 32 cents per share, beating the consensus mark by a penny but falling 47% from the year-ago quarter. Revenues also declined nearly 4.9% year over year to nearly $6 billion, but outpaced the Zacks Consensus Estimate of $5.74 billion.

Starbucks expects an impact of 13 weeks in third-quarter fiscal 2020. The impact of the outbreak is expected to reduce in the month of May and June after wreaking havoc in April. The coffee giant expects substantial recovery in China by the end of fiscal 2020.

However, Starbucks had shut down nearly 50% of company-operated stores in the United States, and above 75% in Canada, Japan and the U.K. due to COVID-19. Although 98% of the stores are open in China, these are running under new schedules and enhanced safety-related protocols, which include limited cafe seating. Management also mentioned that it is unable to provide the full financial impact of the coronavirus due to the uncertainty tied to the duration and impact of it.

Business Update

Starbucks opened 225 net stores worldwide, taking the total tally to 32,050. Global store growth was 6% on a year-over-year basis.

Meanwhile, global comparable store sales fell 10%. Global comps declined due to a 13% decrease in comparable transactions, marginally offset by a 4% increase in average ticket.

The company’s Active Starbucks Rewards loyalty program expanded to 19.4 million active members in the United States, up 15% on a year-over-year basis.

ETFs in Focus

Investors might want to take a look at a few consumer discretionary ETFs which have notable exposure to Starbucks and can cash in on the coffee giant’s earnings results (see: all the Consumer Discretionary ETFs here):

Consumer Discretionary Select Sector SPDR Fund XLY — 4.5% exposure to Starbucks

The fund tracks the Consumer Discretionary Select Sector Index and comprises 63 holdings. Starbucks sits at the fifth spot. The fund’s AUM is $11.92 billion and expense ratio is 0.13%. The fund has gained 1.8% since Starbucks’ earnings release.

iShares Evolved U.S. Consumer Staples ETF IECS — 3.9% exposure

It is an actively-managed fund which employs data science techniques to identify companies with exposure to the consumer staples sector. The fund comprises 131 holdings, with Starbucks occupying the eighth spot. Its AUM is $9.2 million and expense ratio is 0.18%. The fund has gained 0.6% since Starbucks’ earnings release (read: What Will Soft Drink Earnings Hold for These ETFs?).

Vanguard Consumer Discretionary ETF VCR — 3.2% exposure

This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. Starbucks takes the fifth spot. The fund’s AUM is $2.61 billion and expense ratio is 0.10%. The fund has gained 2.9% since the release of Starbucks’ earnings report.

Fidelity MSCI Consumer Discretionary Index ETF FDIS — 3.1% exposure

This fund tracks the MSCI USA IMI Consumer Discretionary Index. Starbucks sits at the sixth spot. The fund’s AUM is $663.8 million and expense ratio is 0.08%. However, the fund has gained 2.8% since Starbucks’ earnings release.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
 
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
 
Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
 
iShares Evolved U.S. Consumer Staples ETF (IECS): ETF Research Reports
 
To read this article on Zacks.com click here.