Starbucks is scheduled to report earnings after Tuesday’s close. The stock hit a record high of $126.32/share in 2021 and is currently trading near $99/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $0.66/share on $9.31 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $0.70/share. The Whisper number is the Street’s unofficial view on earnings.
A Closer Look At The Fundamentals
The company has managed to grow its earnings nicely over the last few years. In 2018, the company earned $2.42, and in 2023 the company earned $3.55. However, earnings are expected to slide to $3.31 in 2024 and then to $3.09 in 2025 and then grow to $3.70 in 2026. Growth investors want to see more growth going forward. The company sports a price-to-earnings ratio of 30, which is 1.2x the S&P 500.
A Closer Look At The Technicals
Technically, the stock is trading around 3% below its 52-week high and currently trading above its 50- and its 200-day moving average lines. The stocks is tracing out a bullish cup-with-handle pattern and a breakout above $103.32 will likely be bullish. The bulls want to see the stock gap up and rally after reporting earnings and the bears want to see it gap down and fall.
Company History
Starbucks began in 1971 as a single coffee bean store in Seattle’s Pike Place Market, founded by Jerry Baldwin, Zev Siegl, and Gordon Bowker. The company initially sold high-quality coffee beans and equipment, focusing on specialty coffee. In 1982, Howard Schultz joined the company and was inspired after a trip to Italy, where he saw the potential for creating an Italian-style coffee bar experience in the United States. After leaving and starting his own coffee company, Schultz eventually purchased Starbucks in 1987 and began transforming it from a coffee bean retailer into a café-style coffeehouse.
Under Schultz’s leadership, Starbucks rapidly expanded, opening its first international store in Japan in 1996 and going public in 1992. The company grew from a regional Seattle business to a global brand, introducing innovative products like Frappuccinos and creating a unique corporate culture that emphasized employee benefits, ethical sourcing, and community engagement. By focusing on creating a “third place” between home and work, Starbucks revolutionized coffee consumption in America and globally, growing to over 30,000 stores in more than 80 countries by 2023, and becoming much more than just a coffee company, but a cultural phenomenon that redefined how people think about and consume coffee.
Company Mission
Starbucks’ mission is “To be the premier purveyor of the finest coffee in the world, inspiring and nurturing the human spirit — one person, one cup and one neighborhood at a time.”
Company Profile
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development.
Its stores offer coffee, tea, and other beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts.
The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, and Starbucks Reserve brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclaimer: The stock has been featured in my FindLeadingStocks.com weekly stock market report.