SBUX's Weekly Share Repurchase Program: A Closer Look at the Transactions

Starbucks Corporation (SBUX) has been actively engaging in a weekly share repurchase program, aiming to reduce the number of outstanding shares and potentially boost earnings per share (EPS). The company's latest transaction details reveal a significant commitment to returning capital to shareholders. Let's delve into the specifics of this program and its potential impact on SBUX's financials.

SBUX's share repurchase program has been ongoing, with the company consistently buying back its shares at favorable prices. In the most recent transaction, SBUX repurchased 1,250,000 shares at an average price of $90.58, totaling approximately $113.2 million. This transaction brings the cumulative quantity repurchased to 5,971,526 shares, representing a significant reduction in the number of outstanding shares.

The share repurchase program can influence SBUX's EPS in two primary ways. First, by reducing the number of outstanding shares, the earnings are distributed over fewer shares, leading to a higher EPS on a per-share basis. Second, the repurchased shares can be retired or held as treasury shares, indicating a return of capital to shareholders, which can be seen as a positive signal by the market.



To assess the potential impact of the share repurchase program on SBUX's EPS, we can compare the company's EPS growth rate with its historical averages. Assuming that SBUX's net income remains constant at $909.2 million, the reduction in outstanding shares from 1150.5 million to 1144.6 million (after the latest repurchase) would result in an EPS increase from $0.99 to approximately $1.02. This represents an increase of around 3% in EPS due to the share repurchase program.



In conclusion, SBUX's weekly share repurchase program demonstrates the company's commitment to returning capital to shareholders and potentially boosting EPS. By reducing the number of outstanding shares, the company can increase EPS on a per-share basis and signal a positive outlook to the market. As the program continues, investors should monitor the progress and assess the potential impact on SBUX's financials, particularly its EPS growth rate relative to its historical averages and compared to its peers in the restaurant industry.