Starbucks Q1 Earnings Preview: Data Shows Visits Down, Will Company Continue Streak Of Missing Revenue Estimates?

Coffee retailer Starbucks Corp SBUX is expected to report year-over-year declines for revenue and earnings per share in the company's first-quarter financial results after market close Tuesday.

Here's a look at the earnings estimates and key items to watch.

Earnings Estimates: Analysts expect Starbucks to report first-quarter revenue of $9.32 billion, down from $9.43 billion in last year's first quarter, according to data from Benzinga Pro.

The company missed analyst estimates for revenue in four straight quarters and missed estimates in six of the past 10 quarters.

Analysts expect the company to report earnings per share of 67 cents, down from 90 cents in last year's first quarter. The company has missed analyst estimates for earnings per share in three of the past four quarters but beaten estimates in five of the past 10 quarters.

The company has not shared guidance for fiscal 2025 citing the CEO transition to Brian Niccol in 2024.

Read Also: Starbucks Faces Sales Slump But Analysts See Silver Lining With New CEO’s Efficiency Strategy

What Experts are Saying: Bank of America maintained a Buy rating on Starbucks with a $117 price target ahead of the company's first-quarter results.

Bank of America analysts highlighted the company's brand strength and the potential to put emphasis on productive areas under new leadership in the January investor note.

RBC Capital reiterated an Outperform rating and $115 price target ahead of the first quarter report.

Data from Placer.ai could serve as a preview of the Starbucks first-quarter same-store sales and overall revenue.

A report highlighting the comparison between Starbucks and Dunkin' Donuts showed that both coffee chains had drops in foot traffic in the fourth calendar quarter of 2024. Starbucks first fiscal quarter includes the months of October, November and December.

In the fourth quarter, foot traffic at Starbucks stores were down 2.9% year-over-year, compared to a 0.7% drop for Dunkin' locations, according to the report.

Here's how the fourth calendar quarter foot traffic compares to other 2024 calendar quarters:

• Q1: Starbucks +1.1% year-over-year, Dunkin' +1.9% year-over-year
• Q2: Starbucks +1.9% year-over-year, Dunkin' -0.7% year-over-year
• Q3: Starbucks -1.8% year-over-year, Dunkin' -1.3% year-over-year

Overall in 2024, Starbucks foot traffic was "relatively flat" compared to 2023, Placer.ai said. The key here could be the sharp drop off in the fourth-quarter data.

The report showed Starbucks saw visitors stay slightly longer than in the past and most visits happen between the 10 a.m. to 7 p.m. time period, while Dunkin' got a larger share of foot traffic before 10 a.m. likely due to food options.

One key to watch is Starbucks increased foot traffic related to several key dates. The report showed that three days in the fourth calendar quarter saw large spikes compared to the daily foot traffic average in 2024.

• Red Cup Day (Nov. 14): +40.4% to daily average
• Black Friday: +26.6% to daily average
• Super Saturday: +27.5% to daily average

These three days could provide a boost to Starbucks results in the quarter.

Key Items to Watch: Aside from foot traffic trends and key days in the quarter, there are other key items that investors and analysts are likely watching ahead of the first fiscal quarter.

New reports showed higher coffee future prices, which could put Starbucks margins and hedging strategy in focus. The company could get asked about what it is doing to prevent further price increases in the future for its commodities and pushing increases back to its customers.

Strikes at Starbucks locations in major cities around the Christmas holiday was a big topic during the quarter and the company could share the impact the strikes had and how it is looking to the future as more stores unionize.

Starbucks said it was considering a sale or partial sale of its Chinese segment. The company will share how this segment is performing in the financial results, but most attention will turn to if there is progress in this consideration and how it could help alleviate poor financial results for the region.

Without current fiscal guidance, investors will also be looking for commentary on the company's growth and initiatives under new CEO Niccol.

"It is clear we need to fundamentally change our strategy to win back customers. ‘Back to Starbucks' is that fundamental change," Niccol said after fourth-quarter financial results.

SBUX Price Action: Starbucks stock is up 0.70% to $99.17 on Monday versus a 52-week trading range of $71.55 to $102.56. Starbucks stock is up 6% over the last year.

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• Starbucks Faces 34 New Union Complaints Amid Rising Tensions with Workers

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