Starbucks lowers guidance, promises new drinks and deals after customer traffic fell in weak Q2
Starbucks lowered expectations for its full-year sales and profit Tuesday after a disastrous quarter that saw a slowdown in store visits across the world. The Seattle coffee giant said revenue for the January-March period dropped 2% to $8.56 billion. That was far short of Wall Street's forecast of $9.12 billion, according to analysts polled by FactSet.
It was the first time since the end of 2020 that the company saw a drop in quarterly revenue. “Our performance this quarter was disappointing and did not meet our expectations," Starbucks CEO Laxman Narasimhan said during a conference call with investors. Shares in Starbucks Corp.
tumbled 12% Tuesday in after-hours trading. Starbucks said a mix of issues impacted sales. In the U.S., the company saw a sharper and faster decline in consumer confidence and spending than it had anticipated.
The Conference Board, a business research group, said Tuesday that U.S. consumer confidence fell for the third straight month in April as consumers continue to confront elevated prices and high interest rates. Bad weather also closed some U.S.
stores briefly during the quarter, Starbucks said. In China, Starbucks said the post-COVID recovery has been choppy, and it's also seeing increasing price pressure from competitors. Starbucks is also facing ongoing boycott of its stores for its perceived support of Israel in the war in Gaza.
Read more on livemint.com
