Coffeehouse chain Starbucks (NASDAQ:SBUX) will be reporting results tomorrow afternoon. Here’s what to look for.
Starbucks missed analysts’ revenue expectations by 0.7% last quarter, reporting revenues of $9.07 billion, down 3.2% year on year. It was a softer quarter for the company, with a significant miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.
Is Starbucks a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Starbucks’s revenue to decline 1.2% year on year to $9.32 billion, a reversal from the 8.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.67 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Starbucks has missed Wall Street’s revenue estimates six times over the last two years.
Looking at Starbucks’s peers in the restaurants segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Kura Sushi delivered year-on-year revenue growth of 25.2%, beating analysts’ expectations by 4.4%, and Darden reported revenues up 6%, topping estimates by 0.7%. Kura Sushi traded down 11.8% following the results while Darden was up 17.3%.
Read our full analysis of Kura Sushi’s results here and Darden’s results here.
There has been positive sentiment among investors in the restaurants segment, with share prices up 6.5% on average over the last month. Starbucks is up 8.7% during the same time and is heading into earnings with an average analyst price target of $103.87 (compared to the current share price of $98.30).
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
