Earnings To Watch: Starbucks (SBUX) Reports Q1 Results Tomorrow

Coffeehouse chain Starbucks (NASDAQ:SBUX) will be announcing earnings results this Tuesday afternoon. Here’s what to expect.

Starbucks beat analysts’ revenue expectations last quarter, reporting revenues of $9.92 billion, up 5.5% year on year. It was a strong quarter for the company, with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ revenue estimates.

Is Starbucks a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Starbucks’s revenue to grow 4.3% year on year, improving from the 2.3% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Starbucks has missed Wall Street’s revenue estimates multiple 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. Kura Sushi delivered year-on-year revenue growth of 23.3%, beating analysts’ expectations by 2.5%, and Darden reported revenues up 5.9%, in line with consensus estimates. Kura Sushi traded down 17.8% following the results while Darden was up 1.2%.

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

There has been positive sentiment among investors in the restaurants segment, with share prices up 13.7% on average over the last month. Starbucks is up 14% during the same time and is heading into earnings with an average analyst price target of $101.41 (compared to the current share price of $98.85).

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