Starbucks shares down in premarket after cautious signal on 2020 earnings

Shares of Starbucks Corp. sank 2.8% in premarket trading Wednesday, after the coffee-selling giant cut its earnings-per-share growth outlook for fiscal 2020, citing a "pull forward" of expected share repurchases into 2019. The company said it expects EPS growth to be "meaningfully below" the growth model of at least 10% growth. The FactSet EPS consensus for 2020 of $3.12 implies 10.6% growth over the 2019 EPS consensus of $2.82. "We elected to pull forward about $2 billion worth of share repurchases that we had originally planned for fiscal 2020 into fiscal 2019," said Chief Financial Officer Patrick Grismer, at the Goldman Sachs Global Retailer Conference, according to a transcript provided by FactSet. Grismer said the repurchases were pulled forward given the "rapidly appreciating" share price. "And with that pull forward then, there will be lower aggregate share repurchases in fiscal 2020 and the associated EPS benefit net of interest expense on the debt issues – issuances this year as well as what we expect to issue next year will be tempered relative to our original expectations," Grismer said. The stock has soared 50.3% year to date through Tuesday, while the SPDR Consumer Discretionary Select Sector ETF has climbed 20.3% and the S&P 500 has gained 15.9%.

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