:max_bytes(150000):strip_icc()/GettyImages-2178607065-e49d9ee9c4b243969bf95b5243b231f1.jpg "What You Need To Know Ahead of Starbucks Earnings")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2178607065-e49d9ee9c4b243969bf95b5243b231f1.jpg)
Key Takeaways
- Starbucks reports fourth-quarter earnings after the market closes Wednesday, a week after it posted disappointing preliminary results and suspended its fiscal 2025 outlook.
- The company said suspending guidance would give it time to evaluate its business under new CEO Brian Niccol.
- Wednesday’s report will be Niccol’s first at the helm of the coffee giant since leaving Chipotle.
Starbucks (SBUX) will report fourth-quarter earnings after the bell Wednesday, a week after the company released preliminary results that missed analysts’ expectations and said it would not provide projections for fiscal 2025 to allow for a transition period for its new CEO.
Analysts expect Starbucks to report a more than 15% year-over-year net income drop to $1.03 billion, or 91 cents per share, on $9.22 billion in revenue, down from $9.37 billion. The coffee giant recently reported preliminary results of 80 cents in earnings per share (EPS) on revenue of $9.07 billion, both of which came in below consensus estimates of analysts polled by Visible Alpha and sent shares tumbling.
Starbucks also suspended its outlook for fiscal 2025, citing the CEO change, with former Chipotle Mexican Grill (CMG) head Brian Niccol having taken over the top job last month. The company said suspending its outlook would provide “ample opportunity” to reevaluate its business. It also announced an increase of its quarterly dividend to 61 cents per share from 57 cents.
| Analyst Estimates for Q4 2024 | Q3 2024 | Q4 2023 | |
| Revenue | $9.22 billion | $9.11 billion | $9.37 billion |
| Earnings Per Share | 91 cents | 93 cents | $1.06 |
| Net Income | $1.03 billion | $1.05 billion | $1.22 billion |
Key Metric: Same-Store Sales
In its preliminary results, Starbucks said same-store sales (SSS) fell by 6% in the U.S. and 7% globally in the fourth quarter.
The chain attributed its “lower-than-expected performance” over fiscal 2024 to a “pronounced traffic decline, including a cautious consumer environment, and our targeted and accelerated investments not improving customer behaviors, as well as the macro and competitive environment in China pressuring our results further.”
Business Spotlight: New CEO, Suspended Outlook
Niccol likely will further discuss priorities he has laid out early in his tenure, like making Starbucks a go-to place for people to spend time, and turning around its sales declines in China.
Analysts from Bank of America wrote recently that despite the suspended outlook, they believe Starbucks should be able to start its turnaround effort in fiscal 2025, and that it can record “easy wins” by improving marketing efforts and fixing its image. Baird analysts wrote that they think Starbucks’ financials “can improve” in fiscal 2025, but believe investors will likely focus more on the chain’s outlook for 2026 and beyond.
Shares of Starbucks finished Friday little changed, leaving them up only slightly for the year — and still roughly around the levels reached when they jumped nearly 25% on Aug. 13, the day Niccol’s hiring was announced.