It’s been a tough year for Starbucks (SBUX). Even as the company innovates on technology as well, if not better, than any other consumer-facing company, the stock has lagged the market…badly. Starbucks’ shares are up 3.1% over the last 12 months, versus a 23% gain for the S&P 500.
The problem has been weaker same-store sales, as well as disappointing results out of China. Those will be the key topics when the company reports its fiscal first-quarter results after the market close today. Wall Street is expecting same-store sales of 3.0% for the latest quarter, though Starbucks has had a tough time meeting expectations of late. In fact, the company has missed Wall Street’s same-store sales forecast seven quarters in a row, after a period of strong results in 2015.
Analysts are also expecting EPS of 57 cents on sales of $6.19 billion.
Long-term investors, though, should pay careful attention to another set of data that Starbucks is likely to share about mobile technology adoption and its loyalty reward program. That was the focus of Barron’s cover story last August, which touted Starbucks’ game-changing mobile platform. (Since our story, Starbucks has traded essentially in line with broad market, up 15%.)
A year ago, 27% of transactions at U.S. company stores were paid using Starbucks’ mobile app, while 7% of total transactions were ordered in advance via the same app. The higher those numbers go, the more Starbucks is able to build loyalty among customers, and, more importantly, increase demand for its food and drinks.