Starbucks (NASDAQ:SBUX) reports earnings after the market closes on Thursday, Jan. 24. Here's what you need to watch for in the results.

Expectations, meet reality
The first question that tends to dominate in the moments after earnings come out is whether the company met the Street's expectations. Analysts see the coffee giant booking $0.57 a share in profits, on $3.84 billion in revenue. That would represent 14% higher earnings and a 12% sales bump.

By comparison, Starbucks turned in 16% revenue growth and 11% earnings growth in the equivalent quarter last year. But that performance was powered by a scorching 9% bump in comparable-store sales. Comps are trending a bit lower lately -- 7% last quarter -- and so a repeat performance at that level is unlikely.

Verismo, meet the market
Starbucks introduced its Verismo home-brewing coffee system this holiday season. And with it, the company is taking aim at the profitable single-serve coffee market now dominated by Green Mountain Coffee Roasters (NASDAQ:GMCR.DL) and its uber-popular Keurig machine.

Green Mountain's crazy sales growth has come back down to earth recently, falling to 33% from the 75% it booked for much of 2011. But that doesn't mean the market will be easy pickings for Starbucks. In fact, discounts over the holiday season suggest that Verismo sales might be less than brisk. We'll find out when Starbucks updates investors on the machine's sales momentum.

Ambitious growth
Starbucks announced aggressive growth plans last month. Those include:

  • Opening new stores -- 3,000 new stores in the Americas region over the next five years, including more than 1,500 in the United States.
  • Selling more packaged goods -- the packaged goods segment, where Starbucks brands are sold at retailers, turned in $1.3 billion in revenue last year. And the company expects it to eventually "rival Starbucks retail store portfolio in terms of size and profitability."
  • Transforming the tea industry -- attack the $40 billion global tea market, armed with its new acquisition of Teavana.

Investors will get a critical update on those growth plans. Key to the company's store expansion, for example, will be the comparable sales growth it reports in the U.S. market. Those comps need to stay in the high single digits to justify Starbucks' lofty store expansion goals.

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