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SBUX: Starbucks Stock Tumbles 12% After Quarterly Report Brews Up Bitter Results
Key points:
- Starbucks shares dip 12% ahead of the bell.
- Consumer pullback dents top, bottom line.
- SBUX stock lags behind the broad index.
Investors digested weak earnings and revenue after the coffee giant’s sales in China took a dip. Guidance was hit, too.
- Starbucks stock
SBUX plunged 12% in after-hours trading Tuesday following the company’s fiscal second-quarter earnings report. The coffee giant undershot both earnings and revenue guidance. Sales for the most recent trimester arrived at $8.6 billion, sliding below analysts’ expectations of $9.1 billion. Net income was reported at $772 million, or 62 cents a share. Investors were hoping for 80 cents in per-share earnings. - Revenue was especially hit in China — the company’s second-largest market — with an 11% decline in same-store sales. Starbucks also lowered its full-fiscal year guidance for revenue growth to low single digits after it had previously lowered it to the range of 7% to 10%. “In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities, or the opportunities ahead,” said CEO Laxman Narasimhan.
- Shares of Starbucks have struggled to whip up a flavorful concoction for investors. Over the past 12 months, the stock is down about 23% while the restaurant subindex in the S&P 500 is up about 2% in the same time span. Investors are hoping that the upcoming summer drink selection could stir consumer enthusiasm and lead to an increase in sales that could lift up the top and bottom line.