Starbucks (SBUX) is the world’s largest coffeehouse chain, renowned for its specialty coffee offerings, inviting store ambiance, and strong brand loyalty. The company pioneered the premium café experience under Howard Schultz, transforming coffee drinking into a lifestyle centered around connection and community. The company’s global strategy combines a consistent brand approach with local adaptation, making Starbucks a defining force in the modern coffee industry. Founded in Seattle in 1971, Starbucks op ...

Core Viewpoint - Starbucks is expected to report its fiscal Q2 results on April 29, with investors hoping for a rebound in stock performance despite a year-to-date decline of 10% and a 28% drop from its 52-week high of $117 per share [1][4]. Financial Expectations - Q2 sales are projected to reach $8.79 billion, reflecting a 2% increase from $8.56 billion in the same quarter last year [4]. - International revenue is anticipated to rise by 5% to $1.84 billion compared to $1.75 billion in the prior period [4]. - Q2 EPS is expected to decrease to $0.49 from $0.68 per share a year ago, indicating a significant decline [5]. Earnings Performance - Starbucks recently exceeded Q1 EPS expectations by 4%, but has shown an average earnings surprise of -2.34% over the last four quarters [5][6]. - The reported earnings history shows fluctuations, with an average surprise of -2.34% across the last four quarters [6]. Stock Performance - Over the last two years, Starbucks stock has decreased by 24%, and it has only gained 11% over the last three years, underperforming the broader index which has returned over 30% [7]. - The stock is currently trading at 28.6X forward earnings, which aligns with its decade-long median and is below the peak of 95.8X during this period [8]. Valuation Insights - Starbucks' valuation is not excessively high compared to the S&P 500's forward earnings multiple of 21.2X and the Zacks Retail-Restaurants Industry average of 26.2X [8]. Future Outlook - Currently, Starbucks holds a Zacks Rank 3 (Hold), with expectations for a resurgence in profitability next year, but it may be premature to consider it a buy for a sustained rebound [9]. - The potential for meaningful upside is contingent on Starbucks meeting or exceeding Q2 expectations and providing guidance that indicates a return to growth [9].