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What To Expect From Starbucks's (SBUX) Q1 Earnings

StockStory - Mon Apr 29, 2:02AM CDT

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Coffeehouse chain Starbucks (NASDAQ:SBUX) will be reporting results tomorrow after market close. Here's what to look for.

Starbucks missed analysts' revenue expectations by 2.1% last quarter, reporting revenues of $9.43 billion, up 8.2% year on year. It was a weak quarter for the company, with a miss of analysts' revenue 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 grow 5% year on year to $9.16 billion, slowing from the 14.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.80 per share.

Starbucks Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing thirteen downward revisions over the last thirty days.Starbucks has missed Wall Street's revenue estimates three times over the last two years.

Looking at Starbucks's peers in the restaurants segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Darden delivered year-on-year revenue growth of 6.8%, missing analyst expectations by 1.7%, and Kura Sushi reported revenues up 30.4%, topping Wall Street's consensus estimates by 1.1%. Darden traded down 5.5% following the results while Kura Sushi was up 5.7%.

Read our full analysis of Darden's results here and Kura Sushi's results here.

Inflation fears have put pressure on growth stocks, and while some of the restaurants stocks have fared somewhat better, they have not been spared, with share price declining 4.9% over the last month. Starbucks is down 3.6% during the same time and is heading into earnings with an average analyst price target of $102.8 (compared to share price of $88.28).

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