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Wall Street can be a tricky place to navigate at times. Sometimes you can get things exactly right, but the stock will react the opposite to what you thought because everyone else had also figured it out and baked it into the share price. That is one reason we try to keep track not only of what we expect, but also whether what others expect is getting out of hand. Here is one we didn’t catch:

Starbucks Corp. (NASDAQ:SBUX) said Thursday that sales at coffee shops open at least 13 months rose 7 percent in May, at the low end of analysts’ estimates, and shares fell slightly in after-hours trading. Starbucks shares fell less than 1 percent to $36 in after-hours trade on Inet after closing at $36.21 on Nasdaq.

Two Wall Street analysts had forecast a same-store sales increase of between 7 percent and 9 percent. The results were at the high end of Starbucks’ own forecast of posting monthly same-store sales increases of between 3 percent and 7 percent.

“Usually when they do roll out their seasonal beverages you can expect a little bit of a bump there,” said McAdams Wright Ragen analyst Dan Geimanm, who added that May same-store sales results do not reflect the full benefit of the drink introductions since they appeared in stores only mid-month.

So much for everyone playing the “guidance game.” Starbucks gave guidance but analysts actually analyzed and came up with their own number, which was outside the range given by management. And kudos to them - the midpoint of the analyst estimates (8 percent) was closer to the actual results than the midpoint of management’s guidance (5 percent.) Although they were a little too optimistic about the performance of the new drinks, it shows they did their homework.

But how about the investor who also figured it out - maybe by seeing the popularity of the drinks during their own store visits - and made a bet that sales would be above management’s guidance? Unless they compared the guidance to what the street was already counting on, they could have been left holding the bag.

In this case, the shares were down only slightly on the news, so it looks like nobody will be hurt too badly. Just try to keep it in mind when you are doing your research. Sometimes expectations get out of hand.

SBUX 1-yr chart:

SBUX 1-yr

Full disclosure: The author is long Starbucks, and hedged a portion of that position on June 1, 2006 using covered calls.

Source: Starbucks' Numbers: Case Study in Baked-in Optimism (SBUX)