Shares in coffeehouse colossus Starbucks plunge 16% after earnings miss
Are consumers starting to push back on their pricey skinny lattes in response to higher interest rates and cost-of-living pressures?
It’s a key question for analysts and investors in Starbucks (SBUX:NASDAQ) after the Seattle-headquartered coffeehouse colossus posted a second-quarter earnings and sales shock, sending the share price plunging close to two-year lows.
The miss was bad enough, but slashing 2024 full-year guidance after telling investors things could get worse before they get better really set the alarm bells ringing. The stock’s 16% collapse is its worst in years meaning the shares are down more than 22% year-to-date and nearly 32% over the past year.
The chain could be dealing with the repercussions of a social media backlash related to its position on conflict in the Middle East, Bank of America analyst Sara Senatore wrote in a research note Monday.
At the same time, former boss Howard Schultz has weighed in calling for an overhaul of the chain’s US outlets.
‘The stores require a maniacal focus on the customer experience, through the eyes of a merchant’, Schultz wrote in a letter on Sunday evening (5 May) and posted to LinkedIn. ‘The answer does not lie in data, but in the stores.’
In a statement, the company said it always appreciates Schultz’s perspective.
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