Key Takeaways Domino's Q4 results likely benefited from value deals, menu innovation and digital momentum.U.S. comps are expected to rise 1.3% at company stores and 2.5% at franchise units.DPZ likely saw inflation and macro pressures pressure margins in the to-be-reported quarter.Domino's Pizza, Inc. (DPZ) is scheduled to report fourth-quarter fiscal 2025 results on Feb. 23, before the opening bell. DPZ’s earnings topped the consensus mark in two of the trailing four quarters and missed on the remaining two ...

Company Overview - Starbucks Corporation (NASDAQ:SBUX) is a leading retailer of coffee, tea, and other beverages, as well as food products, operating through its stores and licensed outlets. The company's brands include Starbucks Coffee, Teavana, Seattle's Best Coffee, Ethos, and Starbucks Reserve [2]. Recent Performance - The company experienced a significant upside surprise in same-store sales, indicating strong performance compared to the previous year. This positive development is attributed to the leadership of CEO Brian Niccol, who took over in August 2024 with a focus on improving service speed to deliver coffee in four minutes or less [1]. Market Sentiment - Jim Cramer expressed a bullish outlook on Starbucks stock, highlighting that the Charitable Trust holds a "huge position" in it. Despite a subsequent pullback in stock price after the earnings report, the overall sentiment remains positive, suggesting that Wall Street is beginning to recognize the company's potential [1].

Market Overview - The S&P 500 experienced a decline of 0.60% on the last trading day of January, marking a sour end to what had been a strong month [1][3] - The dollar index rose by approximately 0.75%, indicating a strong performance in the currency market [2] - Precious metals, particularly silver, saw a historic drop of nearly 27%, the worst since 2008, while gold faced its largest decline since 1983 [2][4] Federal Reserve Nomination - President Trump nominated Kevin Warsh as the next Chair of the Federal Reserve, which has created significant interest in financial markets [1][25] - Warsh's nomination is seen as a potential shift in monetary policy, with expectations that he may be less supportive of aggressive rate cuts compared to other Fed officials [6][26] - There are concerns regarding the confirmation process, with potential opposition from some senators, which could delay his appointment [8][9] Economic Indicators - The labor market shows signs of stabilization, with an unemployment rate of 4.4% reported last month, although concerns remain about the overall trend [11][12] - Inflation is projected to be around 3% or more, complicating the Fed's decision-making regarding rate cuts [12][19] - The Fed's recent actions have included a reduction of the federal funds rate by 75 basis points since September, indicating a cautious approach to monetary policy [10][19] Company Insights - Starbucks reported an 18% gain in January, its best monthly performance in about a year, attributed to a turnaround under new CEO Brian Niccol [67] - The company is focusing on enhancing customer experience and maintaining high-quality offerings, which has contributed to its positive performance [68][69] - Starbucks is also exploring growth opportunities in China, aiming to expand its presence significantly with local partnerships [78][80]

Market Trends - Despite volatility, markets posted gains for January, with the S&P 500 up 1.4% and the Dow Jones Industrial Average up 1.7% [3][5] - The Philadelphia chip index saw a significant increase of 12.9% in January, while the NASDAQ 100 was up 1.2% [4][6] - Energy sector led with a 14% increase, driven by a rally in crude oil prices [9] Job Market - The job market has faced challenges in 2026, with major companies like Amazon and Home Depot announcing significant layoffs due to inflation and AI impacts [2][18] - The unemployment rate remains low, but job seekers face difficulties finding new positions, particularly in sectors like business services and tech [20][24] - AI investments are shifting company focus away from labor, contributing to hiring slowdowns and layoffs [24][28] Starbucks Turnaround Strategy - Starbucks reported strong same-store sales growth in the US for Q4, attributed to operational improvements and customer service initiatives [2][32] - The company aims to enhance customer experience by reducing average wait times from over 5 minutes to below 4 minutes [34] - Starbucks is focusing on creating a welcoming atmosphere in stores and expanding its presence, with plans for new store openings [38][39] Silver Market - Silver experienced a historic drop, losing 30% in a single day, attributed to a stronger dollar and profit-taking after a significant rally [14][16] - Despite the drop, silver finished January with a 19.6% gain, indicating volatility in the commodities market [15]

Core Viewpoint - Johnson Fistel, PLLP is investigating potential shareholder derivative claims against Starbucks Corporation regarding alleged breaches of fiduciary duties by certain officers and directors, following a securities class action related to the company's stock performance during a specified period [1][3]. Group 1: Investigation Details - The investigation is prompted by a securities class action complaint alleging that Starbucks and its senior executives made materially false and misleading statements and failed to disclose adverse facts [3]. - On April 30, 2024, Starbucks announced disappointing second-quarter fiscal 2024 results and lowered its full-year guidance, leading to a stock price drop from $88.49 to $74.44, a decline of over 15% in one day [3]. - The focus of the investigation includes whether the board of directors and senior management allowed misconduct, failed to implement adequate disclosure and risk-management controls, and exposed the company to financial and reputational harm [4]. Group 2: Shareholder Actions - Current Starbucks shareholders who held shares continuously before November 2, 2023, may have standing to pursue derivative claims on behalf of the company [2]. - Shareholders are encouraged to seek more information through the law firm's website or contact the lead analyst for further assistance [2].

Financial Data and Key Metrics Changes - In Q1 fiscal 2026, global revenue increased by 5% to $9.9 billion, with operating margins at 10.1% and EPS at $0.56, down 19% year-over-year [7][21][26] - North America revenue grew by 3% to $7.3 billion, with comparable store sales also increasing by 4% [7][22] - International revenue rose by 10% to $2.1 billion, with comparable store sales growth of 5% [16][24] Business Line Data and Key Metrics Changes - North America saw a 4% increase in comparable store sales, driven by a 3% growth in transactions [22] - The U.S. company-operated sales comps were up 4%, marking the first transaction growth in eight quarters [8][22] - The international segment's comparable sales growth was led by strong performance in China, Japan, and the U.K. [16][24] Market Data and Key Metrics Changes - Starbucks Rewards' 90-day active members reached a record 35.5 million, with both rewards and non-rewards transactions growing year-over-year for the first time in eight quarters [8][22] - In China, comparable store sales grew by 7%, reflecting strong momentum and effective marketing [16][24] Company Strategy and Development Direction - The company is focused on its "Back to Starbucks" plan, aiming for sustained growth and profitability through improved customer service and operational efficiency [6][20] - Strategic investments are being made to enhance technology and streamline operations, with a new Chief Technology Officer appointed to drive improvements [10][20] - The company plans to open approximately 600-650 net new coffeehouses in fiscal 2026, with a focus on international expansion, particularly in China [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, noting that top-line growth is expected to lead to improved margins and earnings [19][34] - The company anticipates that pressures from product and distribution costs will begin to ease in the latter half of the fiscal year [25][32] - Management highlighted the importance of maintaining customer engagement and brand relevance through innovative marketing and menu offerings [15][19] Other Important Information - A joint venture with Boyu Capital in China is expected to enhance Starbucks' growth potential in the region, with a 60% interest being sold to Boyu [27][28] - The company is implementing a new labor model and refining its supply chain to improve efficiency and reduce costs [9][44] Q&A Session Summary Question: North America traffic performance and Green Apron service model - Management noted that North America comp results were driven by transactions, with about 0.5 points attributed to sales transfer from closed stores [36][37] Question: Additional cost opportunities - The company has identified a plan to track down $2 billion in costs over the next two years, focusing on efficiency across the P&L [43][44] Question: Earnings guidance for fiscal 2026 - The higher end of earnings guidance is contingent on maintaining strong comp performance and effective execution of the Green Apron service model [46][47] Question: Same-store sales momentum and service versus innovation - Management emphasized that a strong operating foundation enhances the effectiveness of marketing and innovation efforts [66][69] Question: Afternoon execution and competition - The company sees significant opportunities in the afternoon daypart and plans to enhance its offerings to compete effectively [55][60]

Financial Data and Key Metrics Changes - In Q1 fiscal year 2026, global revenue increased by 5% to $9.9 billion, with operating margins at 10.1% and EPS at $0.56, down 19% from the prior year [5][18][24] - North America revenue grew 3% to $7.3 billion, with comparable store sales also increasing by 4% [5][19] - International segment revenue rose by 10% to $2.1 billion, with comparable sales growth of 5% [13][21] Business Line Data and Key Metrics Changes - North America saw a 4% increase in comparable store sales, driven by a 3% growth in transactions [5][19] - The U.S. company-operated transaction comps grew year over year for the first time in eight quarters, with Starbucks Rewards' active members reaching 35.5 million [6][20] - The international segment's comparable store sales in China grew by 7%, marking the third consecutive quarter of growth [13][22] Market Data and Key Metrics Changes - The U.S. licensed store portfolio revenue declined due to ongoing trends in grocery and retail channels, but growth was noted in business, college, and healthcare segments [21] - The international segment's growth was supported by strong performance in major markets like China, Japan, and the U.K. [21][22] Company Strategy and Development Direction - The company is focused on its "Back to Starbucks" plan, aiming for sustained growth and profitability through disciplined execution [4][5] - Strategic investments are being made to enhance operational foundations, with a focus on technology and supply chain improvements [8][19] - The company plans to open approximately 600-650 net new coffeehouses in fiscal 2026, with a significant portion in China [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, noting that top-line growth is expected to lead to improved margins and earnings [4][16] - The company anticipates that pressures from product and distribution cost inflation will begin to ease as the fiscal year progresses [23][29] - The outlook for fiscal 2026 includes expectations for 3% or better global comparable sales growth [27][30] Other Important Information - A joint venture with Boyu Capital was announced to enhance Starbucks' potential in China, with expectations to close the deal in spring 2026 [24][25] - The company has reduced its menu by approximately 25-30% to streamline offerings and focus on health and wellness platforms [78] Q&A Session Summary Question: North America traffic performance and Green Apron service model - Management noted that North America comp results were driven by transactions, with about 0.5 points attributed to sales transfer from closed stores [36] Question: Additional cost opportunities - The company is tracking down about $2 billion in costs over the next two years, focusing on efficiency across the P&L [41] Question: Earnings guidance for fiscal 2026 - Higher-end guidance is contingent on maintaining strong comp performance, supported by effective execution of the Green Apron service model [44][46] Question: Same-store sales momentum and non-rewards member growth - Management emphasized the importance of engaging both rewards and non-rewards customers, with a focus on broad marketing and menu innovation [48][50] Question: Afternoon execution opportunities - The company plans to enhance afternoon offerings with more relevant beverages and food, leveraging digital menu boards for better customer engagement [54][55]

Core Viewpoint - Starbucks Corporation is expected to experience a turnaround in its stock performance, with optimism surrounding its recovery under CEO Brian Niccol's leadership [1][2]. Group 1: Stock Performance - Starbucks stock reached a high of $94 before closing at $93.28, showing a gradual recovery from the $70s [1]. - The company has been identified as a potential rebound stock for the year, alongside other brands like Nike, which have suffered from previous management issues [2]. Group 2: Operational Challenges - Starbucks has faced significant operational challenges, including poorly performing stores and execution issues, many of which are being addressed [2]. - Improvements have been noted in store throughput, indicating a positive shift in operational efficiency [2]. Group 3: Competitive Landscape - The emergence of competitors like 7 Brew has been acknowledged, but there is confidence in Starbucks' ability to maintain its market position [1].

Core Viewpoint - A class-action lawsuit has been filed against Starbucks Corporation, alleging that the company misleads consumers by claiming to be "Committed to 100% Ethical Coffee Sourcing" while concealing systematic human rights and labor law violations in its supply chain [1][2]. Human Rights Violations - The lawsuit accuses Starbucks of making false representations regarding its ethical sourcing practices, particularly through its C.A.F.E. (Coffee And Farmer Equity) Practices program, which is claimed to be misleading due to documented inaction on human rights violations [4]. - Investigations have revealed extensive human rights abuses, including degrading working conditions and inadequate housing for workers on farms certified under Starbucks' program [5][6]. - A specific complaint from the Brazilian government in 2022 highlighted abusive conditions at Cooxupé, Starbucks' largest supplier in Brazil, which accounts for 40% of its Brazilian coffee supply [6]. Safety: Decaffeination and Chemicals - The lawsuit also addresses misrepresentation regarding Starbucks' decaffeinated coffee, claiming that it contains detectable levels of industrial solvents and volatile organic compounds (VOCs) that are not disclosed to consumers [7]. - Independent testing revealed the presence of harmful substances such as methylene chloride, benzene, and toluene in Starbucks' decaf coffee products, which could be material to consumers concerned about health and safety [8].

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].