Starbucks set to report tonight and if you aren't nervous you haven't been paying attention. 

Shares of the worlds largest coffee shop are trading at levels first hit in 2019, a depressing run of mediocrity that has included 4 CEOs, a national controversy over the use of store bathrooms and the COVID lockdown. The lockdowns were particularly notable for Starbucks because ~20% of its revenues (and much less of its earnings) are generated in the Chinese market, which was something of a career-long hobbyhorse of longtime leader Howard Schultz. 

The company pulled all guidance last fall, one of the first orders of business under CEO Brian Niccol. Suffice it to say the business outlook hasn't gotten more transparent since October.

Same store sales were likely down in the US last quarter, though likely with improved tickets but weaker traffic. FWIW analysts are looking for EPS of 50c on about $8.8b of revenue. There will be currency noise and, as just mentioned, Starbucks itself isn't giving any guidance and has no particular incentive to stretch numbers or paint a rosy international picture. Niccol arrived with a well-earned reputation and he's...

Spotify is down 8% pre-market on missing the EPS estimate for Q4. The subscription numbers were good with monthly usage and premium subscriber numbers coming in better than expected. The guidance for FY subs was light, which seems more on the side of prudent than a red flag.

As I wrote about ahead of earnings, $SPOT had become a crowded long as shares tacked on 20% and $100 heading into the earnings release.

There are companies you want to own for a steady earnings stream. Spotify isn't one of them. 

SPOT into the quarter with too many people needing a huge beat. I was hoping for something more like this. 

Here's how I'm planning to trade it for the Macke Consumer portfolio.

Spotify ("The Swedish Netflix") reports, essentially while we are sleeping tonight. The Podcast King is expected to to report revenue growth of about 20% at $4.6b and earnings of $2.52-ish or more, which is a growth rate too large to really delve into here. Not because it isn't impressive but  because I don't think it matters all that much what Spotify reports as much as how they guide.

Spotify isn't cheap for the best reasons. 1. The company is now printing money and utterly indispensable to ~265 million people worldwide. 2. There isn't (yet) a tariff on steaming stuff 3. Spotify is a global brand, generating more than half its revenues from "other countries" (there are apparently consumers in non-America, I'm having a team look into it).

While we're pie-charting let's add this:

That's Spotify's revenue breakdown on advertisements vs subscribers. Combine those two ChatGPT-generated charts and my hand-written efforts and you know why Wall Street was comfortable bidding SPOT up 33% YTD while the rest of the world burns:

• Ads are flaky but Subs stick around. This is a big part of a lot of my investment thesis this year. I think...