Starbucks (NASDAQ:SBUX), an international retailer and roaster of specialty coffee, is set to report its fiscal 2021 first-quarter earnings on Tuesday, Jan. 26. When it last reported results, management projected optimism as the number of COVID-19 infections and deaths were on the decline. Sadly, that trend reversed, and over the past few months, coronavirus cases have been surging worldwide.   

That's bad news for a coffee retailer with over 32,000 brick-and-mortar locations around the world. The rise in infections may cause people who would otherwise go out for a cup of coffee to stay home and make a cup of their own coffee instead. This earnings report will be of extra importance because of the potential difference between what the company expected to transpire during the quarter and what actually happened.

Here's what investors will want to know when Starbucks announces its first-quarter earnings.

A man and woman holding two steaming hot cups of coffee.

Image source: Getty Images.

Investors want to know if Starbucks...

The first metric investors will want to look at is comparable-store sales growth. During the fourth-quarter conference call, CFO Patrick Grismer said this about comp expectations in 2021: "For the Americas and the U.S., we expect comparable store sales to grow between 17% to 22% in fiscal 2021 and we continue to expect to achieve full comparable store sales recovery in the U.S. by the end of our fiscal second quarter. For the international segment, we expect comparable store sales to grow between 25% and 30% in fiscal 2021." 

Of course, this statement was predicated on COVID-19 impacts continuing to lessen. And given coronavirus infections increased substantially since that report, it would not be surprising if Starbucks walks back some of the optimism expressed.

Second, those interested in the company will want to look at Starbucks Rewards Member totals. These customers tend to spend more than non-members do, and the membership program provides the company a channel for directly communicating with its fans. In September, Starbucks altered the program to allow members to earn rewards without needing to preload their accounts. Early indications show that the change is resonating with customers, and it could lead to faster member signups in the current quarter and beyond.

Finally, investors will want to look at Starbucks' operating profit margin. Since the pandemic's onset, Starbucks' profit margins have been under pressure due to declining sales and increasing costs. However, shareholders can be pleased that management is taking the opportunity to improve its long-term profitability by increasing the proportion of international locations. Domestic locations are more expensive to operate, and so a larger portion of international to domestic could increase operating profit margins to a higher sustainable level. Still, the metric will face pressure in the near term as Starbucks works its way back to functioning at full potential.    

What this could mean for investors

Average analyst expectations on Wall Street are for Starbucks to report revenue of $6.92 billion and earnings per share of $0.56, which would be declines of 2.5% and 29%, respectively.

Perhaps equally as important as what Starbucks reports for the current quarter is what management has to say about the next quarter and the rest of 2021. It guided investors that Starbucks would increase global comparable-store sales by 20.5% in 2021, but that was contingent on the pandemic subsiding as more of the world's population gets inoculated. Unfortunately, the pandemic has gotten worse since Starbucks last reported results, and the vaccine rollout has been much slower than expected.

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