Shares of Starbucks (SBUX) are down 5% after the retail coffee chain announced preliminary quarterly results and suspended its forward guidance.
The early financial results showed that Starbucks sales continue to decline even as a new management team tries to execute a turnaround strategy at the struggling company.
The retail chain of coffee stores is scheduled to release its full third-quarter financial results on Oct. 30. At that time, the company will also unveil details of its “Back to Starbucks” growth plan.
However, preliminary results showed that net sales at Starbucks fell 3% to $9.1 billion U.S. in Q3 of this year. The company also reported preliminary earnings per share (EPS) of $0.80 U.S.
Analysts surveyed by LSEG had expected the company to report earnings of $1.03 U.S. on revenue of $9.38 billion U.S.
Starbucks also reported that its same-store sales declined 7%, its steepest drop since the Covid-19 pandemic struck in 2020. It’s the third consecutive quarter that same-store sales fell.
The company blamed the poor results on weak demand in North America, particularly the U.S. where same-store sales decreased 6% and store traffic dropped 10%.
Owing to the difficult operating environment, Starbucks announced that it is suspending its
fiscal 2025 outlook, citing the “current state of the business” as the reason.
Despite the poor performance, the company increased its quarterly dividend payment, lifting it to $0.61 U.S. per share from $0.57 U.S. previously.
Prior to today (Oct. 23), the stock of Starbucks had risen 3% in the past 12 months to trade at $96.82 U.S. per share.