Starbucks Corp. (SBUX) is expected to report Q1 earnings after market close Wednesday, January 28 with a conference call scheduled for 5:00 pm ET.
Guidance
Analysts are looking for a profit of 16c on revenue of $2.7B. The consensus range is 12c-23c for EPS, and revenue of $2.53B-$3.78B, according to First Call. In November Starbucks forecast negative same store sales for FY09 and said its FY09 earnings would be impacted by lease termination and severance costs from the U.S. and Australia store closures that could total up to an estimated 12c of EPS. In December Bloomberg reported that the company said it will not meet Q1 consensus estimates.
Starbucks also told its employees that it will no longer guarantee to match employee 401(k) accounts in 2009. Despite these cost control efforts, higher commodity costs and declining store traffic are expected to continue to put pressure on margins. Additionally, the company faces increased competition from rivals like McDonald's (MCD), where customers buy less costly McDonald's McCafe premium coffee. Starbucks is expected to announce layoffs in its corporate offices and field operations that may affect 1,000 employees. Shares of Starbucks are down 4% since the beginning of the year.
