Starbucks Corporation (NASDAQ:SBUX) reports its earnings tonight after closing bell. The company surprised to the positive by 3.77% percent in its last report. Will it be able to do it again? Zacks analysts provided a preview on their blog and expect in-line results. Piper Jaffray analysts, however, see a rosier picture for the company heading into earnings.
Expectations for Starbucks’ report
For its fourth fiscal quarter, Starbucks Corporation (NASDAQ:SBUX) management guided for earnings between 59 cents and 60 cents per share. The guidance already includes a 3 cent per share positive impact from the sale of the company’s equity stakes in joint ventures in Chile and Argentina.
Revenues are projected to grow between 10% and 13%, although comps for the quarter aren’t expected to be as strong as they were in the previous quarter. Projections suggest comps will be between 5% and 7%, compared to 8% in the previous quarter. Management guided for operating margins to increase by 100 basis points because of improved operating leverage. They also expect to see a 2 cent per share positive benefit from decreased commodity costs during the quarter. Those lower commodity costs are expected to be partially offset by decreased prices for packaged coffee and negative impacts from currency exchange rates.
Will Starbucks beat expectations?
Zacks analysts do not believe Starbucks Corporation (NASDAQ:SBUX) will come out ahead of consensus. They said in order to suggest that the company would, it must have not only a positive earnings ESP but also a Zacks ranking of 1, 2 or 3.
Zacks ESP for Starbucks is 0%, and Zacks analysts have given the company a ranking of 2, which is a Buy rating. However, they say the 0% ESP makes it difficult to predict whether Starbucks will surprise in tonight’s earnings report.
Piper Jaffray upgrades Starbucks
Piper Jaffray analysts upgraded Starbucks ahead of the company’s earnings report tonight. In his Six Stocks in 60 seconds (via The Street), Jim Cramer called that move “aggressive.”
As of this writing, shares of Starbucks Corporation (NASDAQ:SBUX) had risen almost 1% in midday trading. Shares rose more than 1% on Tuesday after Piper Jaffray’s upgrade.