Today, after the market closes, Starbucks Corporation (SBUX) will unveil its financial results for the first quarter of fiscal year 2025. Here's what investors and market watchers should brace for:

Earnings Per Share (EPS): The current consensus from FactSet estimates an adjusted EPS of $0.67, marking a significant year-over-year decline of 26%. This reflects ongoing challenges in both domestic and international markets.
Revenue: Analysts are anticipating revenue to dip slightly by 1% to about $9.32 billion. This follows a trend of declining same-store sales, which has been a concern for the company.

Recent Developments and Strategic Shifts:

Under the relatively fresh leadership of Brian Niccol, who took the helm in August of the previous year from Chipotle, Starbucks is implementing its "Back to Starbucks" strategy. This initiative aims to reignite customer loyalty through menu simplification, enhanced store experiences, and operational efficiency. However, given the recent start of these changes, tangible benefits might not yet be reflected in this quarter's results.

Labor Issues: The Starbucks Workers Union has been active, with a strike vote during the holiday season. Although the immediate impact was minimal, this could pose a longer-term challenge if labor unrest continues or escalates.

Market Performance:

China: A critical market for Starbucks, China has shown volatility, with last quarter's comparable store sales dropping by 14%. This region is pivotal for Starbucks' growth, accounting for around 10% of its annual revenue. The company must navigate through intensified competition and a sluggish economy to regain traction here.
North America: Here, too, Starbucks has faced headwinds, with comps falling by 6% last quarter, driven by a significant 10% drop in transactions. While inflation has helped buoy average ticket prices, the decline in customer visits is a signal for concern.
Global Footprint: Internationally, Starbucks has seen comps decrease by 9%, indicating a broader challenge in maintaining its global market share and customer base.

Guidance:

Starbucks has suspended providing full-year guidance for 2025 as it assesses its strategies and business model under new leadership. Investors will be eager for any updates or new projections in today's report or during the earnings call.

What to Watch For:

Commentary on the effectiveness and reception of the "Back to Starbucks" plan.
Any updates on the situation in China, including potential strategic partnerships or new market approaches.
Insights into labor relations and how Starbucks plans to address union activities.
Signs of recovery or further decline in customer traffic, both in the U.S. and globally.
Whether Starbucks will reinstate or adjust its guidance for the fiscal year.

TECHS:

As Starbucks releases its Q1 2025 earnings, the focus will be on how the company navigates these turbulent waters, with investors looking for reassurance that the brand can return to its growth trajectory. Keep an eye on the post-market reaction and the subsequent earnings call for further insights.

Since hitting its 200-day moving average in December, SBUX shares have rallied by approximately 14%, reflecting some optimism or perhaps speculative interest in Niccol's turnaround strategy. Today's earnings could be a make-or-break moment for whether this momentum continues.

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