Starbucks Q1 Preview: Wall Street Expects Declines

Starbucks Aims for Revival in First Quarter Earnings Report

Key Indicators to Watch

As Starbucks (SBUX) prepares to release its first-quarter fiscal 2025 results on Tuesday, investors are closely monitoring key metrics: - Revenue: Consensus estimates project $9.32 billion, below the $9.43 billion reported in the same quarter last year. - Same-Store Sales: Analysts expect a decline of 5.30%, compared to a 5.00% growth in Q1 2024. - Foot Traffic: Foot traffic is forecasted to fall by 7.28%, after a 2% increase in the previous quarter.

Performance Outlook

Analysts anticipate a modest increase in foot traffic from the previous quarter, partly offset by lower ticket growth. Starbucks' performance in the US market will be crucial, with Wall Street forecasting a 4.06% decline in same-store sales.

Brand Transformation and Challenges

CEO Brian Niccol's "Back to Starbucks" plan aims to enhance the customer experience with a focus on coffee quality, value pricing, and improved service. However, the pace of turnaround, combined with escalating expenses and decelerating growth, may deter investors.

Coffee Costs and Margin Impact

Despite surging coffee prices, analysts downplay the risk to Starbucks' margins. Coffee accounts for approximately 22% of the company's cost of goods, and fixed-price contracts mitigate commodity volatility.

Operational Changes

Starbucks has implemented several changes, including: - Eliminating surcharges for non-dairy milk - Reinforcing traditional practices like serving coffee in ceramic mugs - Introducing a Coffeehouse Code of Conduct - Announcing corporate layoffs to optimize efficiency

Earnings Expectations

Analysts are keen to hear specifics on Starbucks' investment plans and potential sources of cost savings. They anticipate a more detailed outlook on the company's long-term profitability. Disclaimer: This article provides information for educational purposes only and is not intended as investment advice. Please consult with a qualified financial advisor before making any investment decisions.

Hims & Hers (HIMS) Stock Drops 27% as Telehealth Giant Axes Part of Weight-Loss Business

Hims & Hers (HIMS) stock plunged 26% on Tuesday despite a better-than-expected Q4 report, as investors worry about potential revenue loss from discontinued compounded weight-loss drugs. CFO Yemi Okupe downplayed these concerns, highlighting the company's diversified revenue stream and strong outlook for 2024, but Wall Street remains cautious amid industry-wide changes in semaglutide availability.

Published on: February 25, 2025, 05:01 PM UTC

Reddit's Stock Plummets After Earnings Report

Reddit stock has plunged 23% since earnings, as Google Search traffic and regulatory scrutiny weigh on the social media platform. CEO Steve Huffman and his trust sold $70.5 million worth of shares this week.

Published on: February 21, 2025, 10:03 PM UTC

Reddit Stock Plunges 19% Following Earnings, CEO Sells Shares Amid FTC Inquiry

Reddit (RDDT) stock has lost 19% since earnings, despite recovering traffic from Google Search. CEO Steve Huffman sold $70.5 million worth of shares, the largest sale to date. The FTC is investigating Reddit's policies, and the stock is still up 220% from six months ago.

Published on: February 21, 2025, 06:03 PM UTC

US Consumers See Economic Outlook Dimming, Inflation Expectations Rise on Trade Uncertainty

Consumer sentiment dimmed in February with inflation expectations jumping to 4.3% from 3.3%, and long-run expectations reaching the highest in 28 years. Consumers anticipate price increases due to concerns over tariffs and trade policies.

Published on: February 21, 2025, 06:02 PM UTC

Stellantis' €771 Million Lawsuit Against Automakers Dismissed

Stellantis' lawsuit against Autoliv and ZF/TRW for alleged cartel involvement in safety equipment pricing dismissed by London tribunal.

Published on: February 21, 2025, 03:00 PM UTC