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<p class="has-drop-cap">Starbucks Corporation (<a href="https://tokenist.com/investing/how-to-invest-in-stocks/" rel="noopener noreferrer nofollow" class="deco-link">NASDAQ: SBUX</a>) shares plunged nearly 5% in <a href="https://tokenist.com/investing/how-to-trade-after-hours/" class="deco-link" rel="noopener noreferrer nofollow">pre-market trading</a> Wednesday after the coffee giant reported disappointing preliminary fourth-quarter results and suspended its fiscal 2025 guidance. The company <a href="https://investor.starbucks.com/news/financial-releases/news-details/2024/Starbucks-Reports-Preliminary-Q4-and-Full-Fiscal-Year-2024-Results/default.aspx" target="_blank" aria-label="posted (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">posted</a> its third consecutive quarter of declining sales, with global same-store sales falling 7% – its steepest drop since the COVID-19 pandemic.</p>
<h3 id="starbucks-reports-third-quarter-of-sales-declines">Starbucks Reports Third Quarter of Sales Declines</h3>
<p>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. <br><br>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.</p>
<p>The disappointing results come as Starbucks undergoes a significant leadership change. In August, the company <a href="https://tokenist.com/starbucks-stock-surges-as-coffee-giant-names-new-ceo-and-chairman/" rel="noopener noreferrer nofollow" class="deco-link">named</a> 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.</p>
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<h3 id="starbucks-new-ceo-faces-challenging-times-ahead">Starbucks’ New CEO Faces Challenging Times Ahead</h3>
<p>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.</p>
<p>To reassure investors during the transition, Starbucks increased its <a href="https://tokenist.com/investing/stocks-that-pay-dividends/" rel="noopener noreferrer nofollow" class="deco-link">quarterly dividend</a> 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 <a href="https://tokenist.com/investing/spx-vs-spy/" class="deco-link" rel="noopener noreferrer nofollow">the S&amp;P 500’s</a> 22.67% gain. <br><br>While analysts maintain an average price target of $98.84, with estimates ranging from $76.00 to $120.00, the company’s acknowledgment that its turnaround strategy will take time has left investors cautious about its near-term prospects.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
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<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/starbucks-stock-plummets-as-new-ceo-faces-third-straight-quarter-of-sales-declines/">Starbucks Stock Plummets As New CEO Faces Third Straight Quarter of Sales Declines</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Starbucks Stock Plummets As New CEO Faces Third Straight Quarter of Sales Declines

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