- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted October 23, 2024 at 11:00 am
Starbucks shares tumbled in pre-market trading Wednesday after the coffee giant reported disappointing preliminary fourth-quarter results.
tarbucks Corporation (NASDAQ: SBUX) shares plunged nearly 5% in pre-market trading Wednesday after the coffee giant reported disappointing preliminary fourth-quarter results and suspended its fiscal 2025 guidance. The company posted its third consecutive quarter of declining sales, with global same-store sales falling 7% – its steepest drop since the COVID-19 pandemic.
The Seattle-based coffee chain reported net sales of $9.1 billion, falling short of analysts’ expectations of $9.38 billion, while adjusted earnings per share came in at $0.80, well below the anticipated $1.03.
North American operations were particularly challenging, with same-store sales declining 6% and store traffic dropping 10% despite increased promotional efforts. The company’s China business continued to struggle, with same-store sales plummeting 14% amid intense local competition.
The disappointing results come as Starbucks undergoes a significant leadership change. In August, the company named Brian Niccol, former Chipotle CEO, as its new chairman and chief executive officer, effective September 9, 2024. The announcement initially sent shares surging 14.24% as investors welcomed Niccol’s track record of success at Chipotle (NYSE: CMG), where he engineered a significant stock price increase during his tenure.
Niccol faces numerous challenges as he implements his “Back to Starbucks” plan, which aims to simplify the company’s complex menu, address pricing issues, and improve customer service. The new CEO emphasized the need to “fundamentally change” the company’s strategy, particularly in reshaping its marketing approach beyond loyalty program members and addressing declining traffic in North America.
To reassure investors during the transition, Starbucks increased its quarterly dividend from $0.57 to $0.61 per share. However, the company’s stock performance remains weak, with shares up only 2.84% year-to-date, significantly underperforming the S&P 500’s 22.67% gain.
While analysts maintain an average price target, the company’s acknowledgment that its turnaround strategy will take time has left investors cautious about its near-term prospects.
—
Originally Posted October 23, 2024 – Starbucks Stock Plummets As New CEO Faces Third Straight Quarter of Sales Declines
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult a licensed financial advisor prior to making financial decisions.
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from The Tokenist and is being posted with its permission. The views expressed in this material are solely those of the author and/or The Tokenist and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Related Articles
Join The Conversation
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!