Starbucks Coffee (SBUX) Modestly Higher Ahead of Q1 Earnings Results

Starbucks Coffee (NASDAQ: SBUX) is modestly higher (+0.5%) ahead of first quarter 2015 earnings after the close of trading today. Analysts on average are looking for EPS of $0.80 on revenue of $4.8 billion, representing growth of 12.7% and 13.2%, respectively. Starbucks normally reports in-line to slightly better results and over the last two quarters the stock has dropped 2.2% during the trading day immediately following the earnings report, according to data at EPS Insider.

Recently COO Troy Alstead took an unpaid leave of absence. As a 23-year veteran, it was considered a big loss for the company. Tonight's call may shed some more light on his leave. Investors will also be looking to see if the recent plunge in gas prices has had any positive impact on results.

Ahead of the results, RBC Capital analyst David Palmer reiterated an Outperform rating and maintained EPS estimates and their 5% F1Q Americas SSS growth estimate. He reiterated his above-consensus FY15 EPS estimate of $3.14 (+18% YOY; cons. $3.12), which includes a $0.04 EPS benefit from the integration of its Japanese JV and is slightly above the company's $3.08–3.13 guidance range. The firm's 1Q/15 EPS estimate of $0.81 (+18% YOY; cons. $0.80) accounts for investments in holiday marketing and the company's partner conference (partially offsetting relatively favorable coffee prices). Beyond 1Q, they believe falling dairy prices could also provide EPS upside "Should Starbucks meet our sales estimate, we believe the stock will outperform as the narrative moves to technology-driven throughput improvement during FY15," he said.

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