Starbucks Earnings Report: What to Expect and What It Means for Investors

Alright, coffee lovers and investors, it's that time of the quarter again. Starbucks (SBUX) is about to drop its earnings report, and we're here to help you make sense of it all. So, grab your favorite brew, and let's dive in!

First things first, let's talk about what analysts expect from Starbucks' upcoming report. According to the Wall Street Journal, analysts are forecasting first-quarter revenue of $9.32 billion, down from $9.43 billion in last year's first quarter. Earnings per share (EPS) are expected to come in at 67 cents, down from 90 cents in last year's first quarter. Keep in mind that Starbucks has missed analyst estimates for revenue in four straight quarters and missed estimates in six of the past 10 quarters. However, the company has beaten analyst estimates for EPS in five of the past 10 quarters.

Now, let's take a look at Starbucks' recent earnings trends. In the fourth quarter of fiscal 2024, the company reported a 3% decline in consolidated net revenues to $9.1 billion, and a 25% decline in GAAP earnings per share (EPS) to $0.80. However, the company's active U.S. Starbucks Rewards membership totaled 33.8 million, up 4% year-over-year. For the full fiscal year 2024, consolidated net revenues increased 1% to $36.2 billion, but GAAP EPS declined 8% to $3.31.

So, what can investors expect from Starbucks' upcoming earnings report? Well, for starters, investors will be looking for signs of improvement in the company's revenue and earnings trends. The company's guidance for the full fiscal year 2025 will also be closely watched. Additionally, investors will be interested in updates on the company's growth initiatives and cost-cutting measures.

One thing to keep in mind is that Starbucks has been facing some headwinds in recent quarters, including a decline in comparable store sales and a slowdown in its China business. However, the company has been taking steps to address these issues, such as closing underperforming stores and investing in digital capabilities. Investors will want to see evidence that these efforts are paying off.

Another key metric to watch is Starbucks' operating margin. In the fourth quarter of fiscal 2024, the company's non-GAAP operating margin contracted 380 basis points year-over-year to 14.4%. Investors will want to see if the company can improve its operating margin in the upcoming report.

Finally, investors will be interested in any updates on Starbucks' plans to expand its delivery and digital capabilities. The company has been investing heavily in these areas, and investors will want to see if these efforts are paying off.

In conclusion, Starbucks' upcoming earnings report will be closely watched by investors, who will be looking for signs of improvement in the company's revenue and earnings trends, as well as updates on the company's growth initiatives and cost-cutting measures. With the company facing some headwinds in recent quarters, investors will be interested in any evidence that Starbucks is turning things around. So, keep your eyes peeled, and let's hope for a strong report from the coffee giant!