Starbucks rebounds amid higher profit and sales forecasts, buybacks return (NASDAQ:SBUX)

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Starbucks (NASDAQ: SBUX) has increased by 2.4% after hours after the end of its investor day boiling down to an improving outlook for earnings and sales, and news that the company is resuming share buybacks.

The The company now delivers adjusted EPS annual growth of 15-20% for fiscal years 2023-2025, and global comparable sales annual growth of 7-9% over this period, fueling global revenue growth of 10-12% .

A high US forecast supports this view: the company expects annual US component sales of 7-9% from 2023-2025, up from a previous forecast of 4-5%.

Mock-up sales in China, meanwhile, are expected to grow 4-6% annually over this period, with net stores growing 13%.

The company expects “gradual” expansion in operating margin over the long term, with growth each year.

The company will make $1 billion in investments in fiscal 2023 and increase capital spending to $2.5 billion to $3 billion over the next three years.

As for capital returns, the company’s resumption of buybacks will generate an annual EPS profit of about 1% starting in fiscal 2024, according to Starbucks. Between dividends and buybacks, it expects to return about $20 billion in capital to shareholders over the next three years.

The company expects a dividend yield of approximately 2% for the three-year period.

Learn more about the company’s investor event on Tuesday.

Sallie R. Loera