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Starbucks Hopes for Earnings Buzz

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Slow growth and increased competition have hurt the coffee giant.

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Minyan Morning Memo

One to Watch: Starbucks (SBUX) will be hoping for fat profits at the close, even as it unloads complementary calories on customers in a pastry promotion during the day. The coffee king reports quarterly earnings and could use a jolt of good news. Growth has stalled as frugalistas forsake fancy frappachinos for Folgers in fits of penny pinching pique. Add in costly cannibalization due to chronic over-expansion and an aggressive ad campaign by upstart McDonald's (MCD) ("four bucks is dumb") and many see the stock as a has 'bean'. Shutting subpar stores and regaining its former focus could see the company revive, but becoming buzz-worthy again is an altogether tougher task.

What Just Happened: Hillary Clinton continued her passage to India, currying favor with the country's rapidly multiplying millionaires. Texas Instruments (TXN) entered middle age as it posted a 56% profit plunge fifty years after introducing the microchip. Stocks rose once more on the back of agreeable comments from Street strategy gurus and another uptick in Leading Economic Indicators. Though, the LEI may l-i-e, judging by an article in today's Times about how shuttered stores adorn even Madison Avenue in these tough times.

What's Happening: The same paper reports Spanish bank robberies are on the rise. Something Santander can afford more than most, as it's up after a positive article in the current Barron's. Hermes said first half sales gained over seven percent, testament to an ability to make silk purses (or scarves) from sow's ears even in a recession. Shares rose slightly in overseas action. Here at home, futures are indicating a steady open at this hour, perhaps the pause that refreshes after six successive strong sessions out of the Dow.

What Will Happen: It's all quiet in economics but Bernanke heads to the Hill for his twice yearly Humphrey-Hawkins testimony, always closely watched by the bond market. In a caffeinated day for earnings, expect announcements out of Coca-Cola (KO), Apple (AAPL), Schering-Plough (SGP), Merck (MRK), Yahoo (YHOO), UnitedHealth (UNH) and United Technologies (UTX).

Happenstance: The olde English expression "where there's muck, there's brass" holds true in New York too, judging by this recent treasure found in the trash.
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No positions in stocks mentioned.
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