Starbucks tumbled 5.5 percent in premarket trading after issuing preliminary fiscal fourth-quarter results that missed analysts’ estimates and suspending guidance for its next fiscal year.
Share Price Movement
On Wednesday, the Pre-market indicative price of Starbucks Corporation featured a 5.5 percent decrease to $91.70 per share, from its previous close of $96.82 each on Tuesday.
What Happened
On Tuesday, Starbucks reported lower-than-expected sales for its fiscal fourth quarter, which ended on September 29. The company also announced it would pause its financial outlook for fiscal year 2025 to give its new Chairman and CEO, Brian Niccol, time to review the business.
In the fourth quarter of fiscal year 2024, Starbucks saw a 7 percent drop in global comparable store sales, while total net revenue fell by 3 percent to $9.1 billion from $9.3, even on a constant currency basis.
The company’s GAAP earnings per share stood at $0.80, down 25 percent compared to the previous year. Similarly, non-GAAP earnings per share also came in at $0.80, marking a 24 percent decline on a constant currency basis.
Despite launching new fall items like the Iced Apple Crisp Nondairy Cream Chai and offering more in-app promotions, these efforts didn’t drive more visits. Even the Pumpkin Spice Latte, which returned on August 22 and usually boosts traffic, didn’t have the expected effect.
Management Commentary
CEO Brian Niccol commented on the results that “Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that’s exactly what we are doing with our ‘Back to Starbucks’ plan.”
International Footprint
As of 2024, Starbucks is significantly expanding its international presence, targeting approximately 55,000 stores globally by 2030. The United States remains its largest market with around 16,346 stores, while China is a key focus, aiming for about 9,000 locations by 2025.
In Brazil, Starbucks plans to increase its licensed stores to 1,000, particularly in major cities. Other notable markets include Canada and Japan, each with several hundred stores.
About the Company
Starbucks Corporation is a prominent American multinational coffeehouse chain, recognized as the world’s largest coffeehouse chain. Starbucks initially began as a coffee bean wholesaler, but under Howard Schultz’s ownership, it was transformed into a coffee shop serving espresso-based drinks.
Written by – Siddesh S Raskar
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