Starbucks shares plunge 16% as chain warns on 2024 profits, cites ‘higher inflation’ as ‘risk factor’
NY Post
Java giant Starbucks is starting to feel the financial pinch as inflation-battered caffeine junkies turn away from drinks like their vente triple-soy lattes to lower priced options.
Starbucks CEO Laxman Narasimhan pointed to inflation pressures faced by customers as a factor in the company’s lackluster quarterly earnings report.
“In this environment, many customers have been more exacting about where and how they choose to spend their money, particularly with stimulus savings mostly spent,” Narasimhan said on the company’s Tuesday call.
On Wednesday, shares in the Seattle-based chain plunged 16% Wednesday after Narasimhan warned that its cafes will continue to underperform in 2024.
For the three-month period ended March 31, Starbucks said that same-store sales in the US decreased 3% as foot traffic plunged a disappointing 7%, marking the second consecutive quarter that the coffee chain’s home market has struggled.
“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” Narasimhan said.
