Brian Niccol’s turnaround faces its biggest margin test tonight when Starbucks Corp. (NASDAQ:SBUX) reports fiscal Q2 earnings after the bell.

Wall Street is looking for around $0.44 in EPS on roughly $9.17 billion in revenue, which would be Starbucks’ first year-over-year earnings growth since 2023. Options markets are pricing in a 6.94% move in either direction.

The stock is up 12% year to date heading into the print.

What Will Come Up On The Call

On Kalshi, traders are betting real money on which specific words Niccol and his team will say on tonight’s call.

“Boyu” sits at 87%.

That is the Chinese private equity firm taking up to a 60% stake in Starbucks’ Chinese division, which closed this quarter.

CFO Cathy Smith said the new structure may be roughly 40 basis points accretive to consolidated margins, mirroring the refranchising playbook McDonald’s Corp. (NYSE:MCD) and Coca-Cola Co. (NYSE:KO) ran a decade ago.

“Tariff” is at 90%, and the contract has teeth because Arabica is up sharply over the past year and Brazil is Starbucks’ largest source.

If Niccol confirms that the Supreme Court’s tariff strike-down flows through to H2 margins, that is the bull case unlocking in real time.

“Smart Queue” is at 80%. Starbucks rolls out scheduled mobile ordering across North America on May 11, powered by the Smart Queue algorithm.

“Comparable Sales” sits at 27%, down 17 points. That fade reflects how aggressively management has steered toward “transactions” and “traffic” as the metric that matters, after two years of pricing-driven comps masking negative traffic.

“Union” is at 23%. Starbucks Workers United ended its 131-day “Red Cup Rebellion” strike in February, the longest in company history. Bargaining resumed in April, with 600 unfair labor practice charges still unresolved at the NLRB. A mention tonight likely means concessions are on the table, which could delay the margin inflection.

Reading The Board

CNBC’s Jim Cramer has been Niccol’s loudest defender on Wall Street, saying on the April Monthly Meeting that “a lot of people are impatient, I’m not. I just want to be with Brian.” His Investing Club trimmed Starbucks last week after the stock cleared $100.

Traders expect Niccol to sell the China refranchising upside, defend Smart Queue as proof the turnaround is working, and stay away from union talk.

Stifel’s Chris O’Cull raised his price target to $115 last week, citing mobile location data that supports comparable sales growth of at least 4%.

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