Starbucks (NASDAQ:SBUX) will report its second quarter results on Tuesday, April 29, and investors will focus on the company’s international sales amid President Donald Trump’s tariff plans. Traders will also be watching for comments regarding further recovery plans.
The consensus earnings per share (EPS) estimate is $0.49 (down 27.9% year-on-year) and the consensus revenue estimate is $8.85 billion (up 3.4% year-on-year).
The Seattle-based company imports coffee from more than 30 countries, including Vietnam.
Interestingly, Starbucks (NASDAQ:SBUX) is believed to have reduced its use of hedges against coffee price shocks; however, the company has not detailed the extent of their exposure to tariffs.
Investors may also be considering the increased risk of recession in the United States and the impact on Starbucks (SBUX) due to consumer pressure. There is also growing talk that the backlash against American products could start to impact Starbucks (SBUX) international sales in the coming quarters.
In April, Starbucks (SBUX) was reported to have cooled its expansion plans in India due to consumer spending trends in the country. Notably, middle-class consumers have reduced their spending at Starbucks outlets.
Share buybacks have been discontinued. The share price is not progressing. The dividend is at risk. Revenue is unlikely to grow, and earnings per share forecasts have been cut. What makes investors stick with this stock? I personally don’t see any reason, says SA analyst Luca Socci.
The company managed to beat profit and revenue estimates in the previous quarter.
In the past 2 years, SBUX beat earnings per share estimates 38% of the time and beat revenue estimates 25% of the time.
In the last 3 months, EPS estimates have had no upward revisions and 28 downward revisions. Revenue estimates saw 16 upward revisions and 6 downward revisions, while the company’s stock has fallen 7.4% since the beginning of the year.
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