Core Viewpoint - Starbucks Corporation is facing challenges ahead of its fiscal first-quarter earnings announcement for 2025, with analysts projecting a decline in earnings per share (EPS) compared to the previous year [1][2]. Financial Performance - Analysts expect Starbucks to report a profit of $0.59 per share on a diluted basis, which represents a 14.5% decrease from $0.69 per share in the same quarter last year [2]. - For the current fiscal year, analysts project an EPS of $2.35, reflecting a 10.3% increase from $2.13 in fiscal 2025, with further growth anticipated to $3.02 in fiscal 2027, marking a 28.5% year-over-year increase [3]. Stock Performance - Starbucks' stock has decreased by 5.9% over the past year, underperforming the S&P 500 Index, which gained 14.8%, and the Consumer Discretionary Select Sector SPDR Fund, which rose by 4.6% during the same period [4]. - The company's share price has declined approximately 10-14%, attributed to operational, financial, and sentiment-related factors, while major indices have posted gains [5]. Operational Challenges - Starbucks is experiencing slowing comparable store sales and transaction declines, alongside rising labor and commodity costs, which are impacting profitability and near-term earnings expectations [6]. - The company is also dealing with the financial repercussions of its "Back to Starbucks" turnaround plan, which includes store closures and layoffs, further weighing on its operational performance [6].

Group 1 - Starbucks Corporation (NASDAQ:SBUX) is viewed as an "early-stage turnaround story" under the leadership of Brian Niccol, indicating a potential for recovery and growth [1] - The stock has been range-bound for several weeks but has recently rebounded from its lows, surpassing the 50-day moving average [1] Group 2 - Starbucks sells a variety of products including coffee, tea, beverages, and food items under several brands such as Starbucks Coffee, Teavana, and Seattle's Best Coffee [2]

Core Viewpoint - The article discusses the potential for profit through bear call spread trades in a market that may be due for a pause, specifically highlighting two candidates for such trades. Group 1: Bear Call Spread Overview - A bear call spread is a vertical spread involving the sale of one call option and the purchase of another call option within the same expiry month, generating a credit for the trader while providing protection against adverse moves [2][3] - This strategy is most effective when the stock declines, but it can also yield profits if the stock remains flat or rises slightly [3] Group 2: Candidate Analysis - Starbucks (SBUX) - Starbucks is currently trading below its 21, 50, and 200-day moving averages, with a Barchart Technical Opinion rating of 100% Sell, indicating a strong short-term outlook for maintaining the current downward trend [4] - Long-term indicators support a continuation of this trend, with potential resistance areas identified around the price level of 90 [4] - Starbucks operates as a global roaster and retailer of specialty coffee, offering a range of products including food items and premium teas, primarily through its retail stores [5] - The company also generates revenue through licensed stores, consumer packaged goods, and foodservice operations, receiving royalties and license fees from both U.S. and international licensed stores [6]