Starbucks to Post Q1 Earnings: What's in the Cards for the Stock?

Starbucks Corporation SBUX is scheduled to report first-quarter fiscal 2025 results on Jan. 28, 2025, after the closing bell.In the last reported quarter, the company reported adjusted earnings per share (EPS) of 80 cents, in line with the Zacks Consensus Estimate. The bottom line decreased 24.5% year over year.The company’s earnings met the Zacks Consensus Estimate in two of the trailing four quarters and missed on two occasions with an average surprise of negative 4%.Starbucks Corporation Price and EPS Surprise Starbucks Corporation price-eps-surprise | Starbucks Corporation QuoteStay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Trend in Estimate Revision of SBUXThe Zacks Consensus Estimate for fiscal first-quarter EPS has declined to 65 cents from 66 cents in the past seven days. The expected figure indicates a fall of 27.8% from the year-ago quarter’s 90 cents per share.The consensus mark for revenues is pegged at $9.31 billion. The metric suggests a deterioration of 1.2% from the year-ago quarter’s figure.Factors Likely to Shape Starbucks’ Quarterly ResultsStarbucks’ fiscal first quarter performance is likely to have benefited from strong customer demand and an expanded store footprint. Initiatives such as reintroducing condiment coffee bars, simplifying the menu and offering non-dairy milk options (at no extra charge) are likely to have improved efficiency, enhanced throughput and reduced customer wait times, driving customer satisfaction and traffic in the fiscal first quarter.Seasonal menu items and holiday campaigns are anticipated to have played a role in driving customer visits during the fiscal first quarter. The rollout of the Clover Vertica brewers in more locations and investments in digital engagement, including enhancements to its mobile ordering system, is likely to have aided the company’s fiscal first quarter top line.Despite its strong brand equity, Starbucks continues to face traffic challenges, particularly during off-peak hours and in U.S. stores. The company’s focus on marketing to Starbucks Rewards members has unintentionally alienated non-members, leading to declines in foot traffic. Reflecting the ongoing challenges, our model predicts fiscal first-quarter comps to fall 4.4% year over year.SBUX’s fiscal first-quarter margins may remain under pressure due to inflationary costs related to labor, raw materials and supply chain inefficiencies. While operational improvements are expected to partially offset these pressures, heightened promotional activity during the holiday season and investments in partner wages could weigh on the company’s profitability. Our model predicts total operating expenses in the fiscal first quarter to rise 4.1% year over year to $5.2 billion.What Our Model Says About SBUX StockOur proven model does not conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.Earnings ESP: Starbucks has an Earnings ESP of +4.78%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: The company has a Zacks Rank #4 (Sell).Stocks With the Favorable CombinationHere are some stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.Chipotle Mexican Grill, Inc. CMG has an Earnings ESP of +1% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.CMG’s earnings for the to-be-reported quarter are expected to increase 14.3% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 9.8%.The Cheesecake Factory Incorporated CAKE currently has an Earnings ESP of +1.39% and a Zacks Rank of 2.CAKE’s earnings for the to-be-reported quarter are expected to increase 13.8% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 14.1%.CAVA Group, Inc. CAVA has an Earnings ESP of +8.89% and a Zacks Rank of 3 at present.CAVA’s earnings for the to-be-reported quarter are expected to increase 200% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 91.8%.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Starbucks Corporation (SBUX): Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis Report CAVA Group, Inc. (CAVA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks