Starbucks recently saw a drop in sales at stores that have been open for a while, marking the first time this has happened in nearly three years. Because of this, the company has adjusted its expectations for how much money it will make this year, lowering the forecast. The biggest issues are in the United States and China, where Starbucks does a lot of business.
After the news about the drop in sales and the revised forecast came out, the value of Starbucks stock fell by 12% in trading that happened after the regular trading hours on Tuesday. This made investors feel less confident about the company’s future.
Starbucks had a tough time meeting its earnings goals for the quarter. They said part of the reason they didn’t do as well as expected was because of problems in West Asia, where there’s been political unrest.
The person in charge of money stuff at Starbucks, Rachel Ruggeri, acknowledged that the company faced challenges in the second quarter. She said they’re having to rethink how they get people to buy more coffee because of these ongoing problems.
Before, Starbucks thought they’d make 4 to 6 percent more money this year compared to last year. But now they’re saying they might not make any more money at all. They think sales might stay the same or even go down a little, both in the US and internationally.
The head of Starbucks, Laxman Narasimhan, pointed out that bad weather in the US and a not-so-great economy made people buy fewer fancy drinks.
In China, sales at Starbucks stores that have been open for a while dropped by 11%, while in the US, they went down by 3%.
Overall, Starbucks didn’t sell as much coffee as they thought they would. Sales at their stores around the world dropped by 4% in the second quarter, which was a lot more than what experts had guessed would happen.
