May 08, 2024 (MENAFN via COMTEX) --
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Starbucks Reeling From Post-Earnings Plunge
Starbucks (NASDAQ:SBUX) is a Seattle-based roaster, markets, and retailer of coffee that has expanded into a global behemoth that rivals the top fast food operators on the planet. However, the company has run into hurdles in the years following the COVID-19 pandemic. Shares of Starbucks have dropped 16% month-over-month as of close on Monday, May 6, 2024. The stock is now down 22% in the year-over-year period.
The company released its second quarter (Q2) fiscal 2024 earnings on April 30, 2024. In Q2 2024, Starbucks reported that global comparable store sales fell 4% year-over-year, which was driven by a 6% drop in comparable transactions. Starbucks opened 364 net new stores in Q2 2024, ending the period with a total of 38,951 stores worldwide. Consolidated net revenues fell 2% year-over-year to $8.6 billion and GAAP earnings dropped 14% to $0.68.
"In a highly challenged environment, this quarter's results do not reflect the power of our brand, our capabilities, or the opportunities ahead," said Starbucks CEO Laxman Narasimhan."It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us."
Former Starbucks CEO Howard Schultz said that the company's leadership needed to spend more time in store sand focus on coffee drinks to turn around sales going forward. Schultz has remained chairman emeritus since the fall of 2023.
Shares of Starbucks are currently trading at a price-to-earnings ratio of 19. That puts the coffee retail giant in favourable value territory at the time of this writing. Moreover, the stock offers a quarterly dividend of $0.57 per share. That represents a 3.1% yield.
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