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With earnings right around the corner for coffee giant Starbucks (NASDAQ:SBUX), investors are wondering whether the stock will plummet further, after already losing close to 20% from its 52-week high of $62, or whether the stock will rebound to create new annual highs. I feel the answer does not lie in tomorrow's earnings call (assuming there is nothing horribly wrong reported), but rather in the coming holiday season, which historically has been Starbucks' best sales period.

In addition to the new expansion into India, which will not be reflected until the next quarter, there are many things stateside that provide a promising, hopeful few months ahead for the coffee chain that will not be reflected in tomorrow's earnings call. Let's see the catalysts that should propel Starbucks to new highs after the upcoming winter holiday season becomes history.

Learning From The Past

Warm, fuzzy slippers, holidays with family, and hot drinks on cold days. These are all highlights of a typical, happy holiday season for many Americans, and part of that equation usually involves drinks and gift cards from Starbucks. In the first quarter of fiscal year 2012, which included sales from the last winter holiday season, Chief Financial Officer Troy Alstead reported the company had "the most successful holiday season in [its] history," after sales included close to $500 million in gift cards in December 2011 alone. CEO Howard Schultz reportedly spent a full year planning the holiday season line up, and it clearly paid off. This record-breaking performance is nothing new for Starbucks, however.

Going further back to the first quarter of fiscal year 2011, profit increased 44% to $0.45 cents per share, compared the first quarter of 2010. Schultz, again, placed holiday sales as the primary catalyst in the profit increase, and was quoted as saying:

Our holiday lineup, bolstered by Christmas Blend and Starbucks Christmas VIA, along with the world-class service of our partners, resonated well with customers and led to record results for the quarter.

The holiday season is clearly a historically record-breaking time for Starbucks, and this can be seen even without looking at the company's financial results. Simply a visiting a store, or even the desire for a warm beverage on the cold days of winter, provides inspiration to spend at Starbucks. This fact will never change as long as Starbuck's retains its brand image, continues to serve delicious hot drinks and food, and the weather during the season remains cold. None of these factors have shown any signs of going away anytime soon.

Bigger And Better

This winter season should be another record breaking season. Starbucks retains all the excellent holiday items that have boosted sales in the past, such as the traditional Pumpkin Spice and Peppermint flavored drinks for the holiday season, as well as its usual lineup.

However, this holiday season welcomes new popular additions that should drive sales to record highs. First, Starbucks' Verismo at-home latte maker went on sale in stores on October 16, 2012, after selling out and beating expectations in September when the machine started selling on the Starbucks website and at Williams-Sonoma stores. The company has every expectation that the Verismo will continue to be a smash hit this coming holiday season. According to Cliff Burrows, president of the Starbucks Americas division: "We are looking forward to the Verismo being a popular gift this holiday season." I have every ounce of confidence this will be proven in the coming months.

In addition to an excellent line up of products involving classic holiday items and the new Verismo system, Starbucks is also focusing on other aspects of its business to optimize holiday sales. First, on October 16, 2012, the company made several significant money-saving changes to its Starbucks Rewards Program. Most noticeably, the program is entirely digital, compared to its former practice of sending postcards with printed rewards coupons for free drinks and such.

Additionally, Starbucks has ceased offering free soymilk and syrup additions to drinks, and stopped providing a free beverage with the purchase of a bagged coffee for Rewards Program members. While the exact savings between the digital transition and cutting the soymilk and syrups are unclear, we can conclude the savings will be in the millions or even tens of millions, as page three of the Fiscal Year 2011 Annual Report states there are over 3.6 million "active members" of the Rewards Program as of the end of FY 2011. Considering that every member receives a free drink on their birthday -- a coupon for which used to be mailed as a post card costing $0.29 cents per postcard -- this is a savings of $1.04 million just on postage. The savings from the milk and syrup will likely be comparable or more.

Finally, Starbucks also recently teamed up with Rodarte, an indie art duo, to design its holiday season gift card. While this may not seem noteworthy, remember that gift cards provided $500 million in sales last December alone. Being the socially conscious chain that Starbucks is, a great amount of customers are attracted to the company for its image and brand above all. This has been discussed in depth as competitors such as McDonalds (NYSE:MCD) and Dunkin' Brands (NASDAQ:DNKN) step up their game. Therefore, with the success in gift card sales during the holiday season, it is entirely reasonable to conclude a trendy design will attract even more attention than usual.

Conclusion

All of the points mentioned above will not be reflected in tomorrow's earnings call. Therefore, even if the earnings call misses, investors still have hope and should hold the stock at least until after the holiday season is reported. This is important to remember, as the stock has trended down lately given a weak third quarter, yet in the long term, the company has many bright growth prospects that should push its stock much higher. Now is a good time to buy on a dip.

Source: Starbucks Will Excel This Holiday Season