What do SBUX's past earnings misses signal for future quarters?

Starbucks' past earnings misses, particularly in the second quarter of fiscal year 2024, suggest that the company may continue to face challenges in the near term but also indicate potential for improvement in the future quarters. 1. **Challenges Identified**: - The company has seen a decline in traffic to its cafes, primarily due to competition in China and some U.S. consumers boycotting its drinks. - Same-store sales have fallen, with a 14% drop in China and a 6% decline globally in the fourth quarter. 2. **Signs of Improvement**: - Despite the challenges, Starbucks has reported earnings beats in other quarters, indicating that the company's initiatives are starting to have a positive impact. - The company has been simplifying its menu, which could lead to improved efficiency and customer satisfaction. - Starbucks is expecting its sales to rebound, and the company has a history of consistent dividend growth, which could support investor confidence. 3. **Future Outlook**: - Analysts expect Starbucks to report a profit of $0.51 per share and $8.83 billion in revenue in the fiscal second quarter of 2025. - The company's full-year FY 2024 revenue growth is expected to be in the range of 7% to 10%, with global same-store sales growth forecasted at 4% to 6%. - The new CEO's focus on restructuring the business and improving operational efficiency could lead to a turnaround in the company's performance. In conclusion, while Starbucks has faced recent challenges, the company's strategic initiatives and the expectation of sales rebound suggest that future quarters could show improved performance. The new CEO's leadership and the company's ongoing efforts to streamline operations and grow its global footprint provide a positive outlook for Starbucks' future earnings.