Starbucks Earnings—Can the company finally beat estimates?
Starbucks Earnings—Can the company finally beat estimates?
By:Mike Butler
A lot of weight is being placed on next week’s earnings announcement
- Starbucks is scheduled to report quarterly earnings on Jan. 28 after the market closes.
- The company looks to recover from four bad earnings reports.
- Its stock is up almost 10% to start 2025.
- Analysts expect the company to report earnings per share of $0.67 on $9.32 billion in revenue.
Starbucks (SBUX) is slated to release quarterly earnings on Jan.28 after the stock market closes. The company is expected to report earnings per share (EPS) of $0.67 on $9.32 billion in revenue. Revenue estimates are higher than last quarter, while EPS estimates are significantly lower. All said, Starbucks has failed to exceed EPS and revenue estimates for the past four quarters. The coffee company is looking to rebound with a solid earnings report this week.
SBUX stock has rallied over $10 from the recent low in December 2024, and many investors are looking for change after the hiring of new CEO Brian Niccol. After such poor earnings results, it feels like only a matter of time before things change—it's just a matter of how.
In the last earnings call, execuitives did not lay out much of a plan but made defensive remarks: “As shared in our press release last week, our results do not reflect the strength of our brand,” said Rachel Ruggeri, chiief financial officer. “I have seen what Starbucks is capable of when we focus on what we do best. I have confidence in our ability to turn around our business and expect we will return to long-term growth.”
Niccol has expressed optimism, saying that “it is clear we need to fundamentally change our strategy to win back customers. ‘Back to Starbucks’ is that fundamental change. My experience tells me that when we get back to our core identity and consistently deliver a great experience, our customers will come back. We have a clear plan and are moving quickly to return Starbucks to growth.”
Regardless of what’s in the headlines, we can look to the options market for clarity around earnings announcements. Implied volatility helps us put context around expected stock price moves for the week that earnings are announced, and that is no different for Starbucks.
Starbucks has a decent expected stock price move relative to the notional value of the stock price for earnings next week. We're seeing a +/- $6.05 expected stock price move against the current price of around $97. This is just over 6% of the stock price, and we typically see earnings reports land between 5%-10% of the stock price for most companies.
This seems low for so much uncertainty around Starbucks, but looking to the March options expiration cycle we can see an expected move of just +/- $7.41.
That tells us next week's stock price expected move makes up for a massive chunk of the expected move through March. In other words, a lot of weight is being placed on next week’s earnings announcement.
Bullish on Starbucks stock for earnings
If you're bullish on Starbucks earnings, you're looking for an EPS and revenue beat. It feels natural that if they can finally break out of the slump of poor earnings, the stock market may look favorably upon such data. A clearer and more positive sentiment for the rest of 2025 wouldn't hurt, either.
Bearish on Starbucks stock for earnings
If you're bearish on Starbucks earnings, you're looking for an EPS and revenue miss. If one of the numbers exceeds estimates, that may result in a stalemate but earnings are very volatile and unpredictable. If we hear more of the same sentiment without clear direction and some bad numbers, we could see the stock price fall from the recent rally.
Tune in to Options Trading Concepts Live at 11 a.m. CST on Jan. 28 ahead of the Starbucks earnings call for some options trading strategies.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2025 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.