SEATTLE - Starbucks Corporation (NASDAQ:SBUX) announced today an increase in its quarterly cash dividend, marking the company's fourteenth consecutive annual hike. The new dividend is set at $0.61 per share of outstanding Common Stock, up from the previous $0.57. This change will take effect with the dividend payable on November 29, 2024, to shareholders of record as of November 15, 2024.
The move brings Starbucks' annual dividend rate to $2.44 per share. Since initiating its dividend in 2010 at $0.05 per share, Starbucks has maintained a consistent pattern of dividend growth, with a compound annual growth rate (CAGR) of approximately 20%.
Starbucks, a company recognized for its specialty coffee and commitment to ethical sourcing and roasting of high-quality arabica coffee, has expanded to over 40,000 stores globally. The dividend increase reflects the company's confidence in its financial performance and its commitment to returning value to shareholders.
The press release also contained forward-looking statements regarding the company's future prospects, outlining potential risks and uncertainties that could impact Starbucks' operations and financial results. These include changes in consumer preferences, global economic conditions, supply chain issues, and the impact of health epidemics or other public health events, among others.
Investors should note that forward
In other recent news, Starbucks Corporation experienced a 7% decrease in global comparable store sales and a 3% decline in consolidated net revenues to $9.1 billion in its fiscal fourth quarter. The company also reported a 25% drop in GAAP earnings per share to $0.80 compared to the previous year. Despite these challenges, Starbucks' Board of Directors approved an increase in the quarterly cash dividend from $0.57 to $0.61 per share. Recent developments also include the suspension of guidance for the fiscal year 2025 and the announcement of a strategic shift under new CEO leadership.
In the realm of financial analysis, BTIG maintained a Buy rating on Starbucks, citing confidence in the new CEO's industry experience. However, Jefferies downgraded Starbucks' stock rating from 'Hold' to 'Underperform', citing operational challenges.
Starbucks is also expanding its global coffee research efforts with the addition of two new coffee innovation farms in Guatemala and Costa Rica. This initiative is part of a broader effort to enhance coffee productivity and climate resilience. Lastly, Starbucks has been part of escalating labor union actions across the United States, with employees holding strikes over staffing issues. These are the recent developments in the company's landscape.
InvestingPro Insights
Starbucks' recent dividend increase aligns with its strong financial position and commitment to shareholder returns. According to InvestingPro data, the company's dividend yield stands at 2.36%, with a dividend growth rate of 7.55% over the last twelve months. This consistent dividend growth is further supported by an InvestingPro Tip, which highlights that Starbucks has raised its dividend for 14 consecutive years.
The company's market capitalization of $109.78 billion underscores its position as a prominent player in the Hotels, Restaurants & Leisure industry, as noted in another InvestingPro Tip. Despite facing short-term challenges, including 8 analysts revising their earnings downwards for the upcoming period, Starbucks remains profitable with a P/E ratio of 27.09.
Investors seeking a deeper understanding of Starbucks' financial health and future prospects can access additional insights through InvestingPro, which offers 7 more tips not covered here. These additional tips could provide valuable context for evaluating the company's dividend sustainability and growth potential in light of current market conditions.
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