What Are We Expecting From Starbucks (NASDAQ: SBUX) Earnings?

Starbucks Corporation (NASDAQ: SBUX), the global coffeehouse chain, is expected to release its latest earnings report tomorrow afternoon. Investors are closely monitoring the announcement, especially after the company missed revenue targets in the previous quarter.

Last quarter, Starbucks failed to meet analysts' revenue expectations by 6.5%, with total revenue amounting to $8.56 billion—a 1.8% decline year-over-year.

For the upcoming report, analysts forecast that Starbucks's revenue will come in flat compared to the same quarter of the previous year, pegging expectations at $9.25 billion. This projected stagnation marks a significant slow down from the 12.5% revenue growth recorded in the same quarter last year.

The adjusted earnings per share (EPS) for Starbucks are projected to be $0.93. This key indicator of profitability will be scrutinized by investors, as the company has missed Wall Street's revenue estimates four times over the last two years.

Comparatively, competitors in the restaurants segment have posted varied results. Domino's, for example, achieved a 7.1% increase in year-on-year revenue growth, aligning with analyst expectations. Meanwhile, BJ's Restaurants' revenue remained flat, in line with consensus estimates.

The market reactions to these companies' earnings reports were negative, with Domino's (NYSE: DPZ) stock price decreasing by 13% and BJ's (NASDAQ: BJRI) also down by 15% after their earnings announcements. Markets are hitting misses hard, with index valuations at highs.

Starbucks's share price has seen a 20% decline on a YTD basis.

With this earnings report, Starbucks faces a critical moment to reassure the market and its investors. The company must demonstrate its ability to navigate a challenging economic landscape, marred by concerns over stalled growth amid lofty valuations. The coffeehouse giant is under pressure to deliver results that can invigorate confidence and potentially realign its stock trajectory with analyst expectations.