martinrlee
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Coffee jolt: Starbucks (SBUX) drops to 52-week low after full-year guidance slash. (00:24) Cruise operator Viking (VIK) prices IPO at $24 a share, near top of range – reports. (01:54) Google (GOOG) (GOOGL) to pay News Corp. (NWSA) up to $6M annually to develop AI content, products: report. (02:47)
This is an abridged transcript of the podcast.
Starbucks (NASDAQ:SBUX) dropped some bombshells on its earnings conference call. The coffee chain said it expects full-year global revenue growth to be at the low-single digit rate, down from a prior forecast of +7% to +10%.
Starbucks (SBUX) also sees U.S. comparable sales growth to be at a low single-digit rate to flat, vs. the prior expectation of +4% to +6%. On the development front, Starbucks (SBUX) now sees global unit store growth of ~6%, down from a prior expectation of +7%. Meanwhile, operating margin is expected to be flat on a year-over-year basis, instead of showing ‘progressive’ expansion.
“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” updated CEO Laxman Narasimhan. “It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us,” he added. During the earnings call, SBUX management said consumers tightened their wallets in the U.S. during FQ2 when it came to food and drink spending.
Looking ahead, Starbucks (SBUX) plans to boost U.S. store traffic this summer with new drink options, including the first energy beverage from the company.
Starbucks is down 12% in premarket trading at a new 52-week low.
Luxury cruise operator Viking Holdings (VIK) priced its initial public offering near the top end of an expected range.
Viking and two investors sold 64.04 million shares for $24 a share, near the top end of a range of $21 to $25, according to a Bloomberg report on Tuesday, which cited people familiar with the matter. The cruise line and the investors raised $1.54 billion in the IPO.
According to a Reuters report, At the IPO price, Viking will be valued at $10.4 billion, based on its outstanding shares, making it the biggest stock market debut this year.
Viking’s (VIK) shares will begin trading on the New York Stock Exchange today under the symbol “VIK”.
In a recent SEC filing, Viking (VIK) reported a loss of $1.85B on $4.7B in revenue as cruise operating expenses increased by 33% to $2.85B.
Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has reportedly closed a deal with News Corp. (NASDAQ:NWSA) to pay the media company between $5M and $6M per year to develop artificial intelligence-related content and products.
The Information reported that the deal is part of a longer partnership between the two companies, citing a News Corp. employee and person close to the deal.
However, a News Corp. spokesman told Seeking Alpha, “We absolutely do not have an AI content licensing deal with Google, though we do have a number of partnerships with Google across our businesses.”
News Corp. shares fell 1.5% on Tuesday, while Google shares ended the session down nearly 2%.
Other articles on Seeking Alpha:
Expect no rate change, hawkish tone, balance sheet clues at Fed meeting
Amazon sticks with the master plan of no dividend payouts, heavy capex spending
Microsoft plans cloud, AI infrastructure in Thailand, to open 1st data center in the country
Catalyst watch:
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Chinese electric vehicle makers NIO (NIO), Li Auto (LI), and XPeng (XPEV) will update on monthly deliveries. Shares of Tesla (TSLA) have been volatile over the last year following the China EV demand updates.
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Of interest to the video game sector, Circana will release monthly hardware and software data.
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Atlassian (TEAM) will host its Investor Day with financial analysts and investors.
U.S. stocks on Tuesday ended lower on the last day of April.
The Nasdaq (COMP:IND) slipped 2.04%, while the S&P 500 (SP500) retreated 1.57%. The Dow (DJI) fell 1.49%.
All 11 S&P sectors finished in the red.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. Crude oil is down 1.5% at more than $80 per barrel. Bitcoin is down 8% at more than $56,000.
The markets in Germany, France, China, Hong Kong, South Korea and India are all closed for a holiday.
The biggest movers for the day premarket: Pinterest (NYSE:PINS) is up 17% following the release of its Q1 earnings report, which exceeded market expectations.
On today’s economic calendar:
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8:30 Treasury Refunding Announcement
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2:00 PM FOMC Announcement
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2:30 PM Chairman Press Conference
