SBUX: Starbucks Stock Slumps 7% After Serving Up a Lukewarm Earnings Brew

Wall Street wanted a double shot. Instead, Starbucks delivered a half-caf miss.

☕ Starbucks Stock Takes a Spill

• Shares of Starbucks SBUX sank 7% in pre-market trading Wednesday after the coffee giant reported fiscal second-quarter earnings that left investors reaching for something stronger than a flat white.
• While revenue met expectations at $8.8 billion, earnings per share came in at 41 cents, well below the 49-cent consensus. That’s a 40% drop in profit from a year ago — and a bitter blend to swallow.

📉 Same-Store Sales Cool Off

• Same-store sales declined 1% globally, and North America — the crown jewel in Starbucks’ roast — saw transactions fall 4%, even as overall revenue grew 3%, mostly thanks to new store openings. In other words, the new locations are pulling some weight — but the regulars aren’t coming back.
• CEO Brian Niccol tried to pour some excitement into the mix. “My initial optimism has turned to clear confidence,” he said, touting the company’s “Back to Starbucks” plan.

🧋 Investors Still Waiting for the Real Refill`

• “Our financial results don’t yet reflect our progress,” he said. “But we have real momentum... we’re testing and learning at speed and we’re seeing changes in our coffeehouses.” Translation: the percolation is happening — just not fast enough for Wall Street’s taste buds.
• The rough brew for the quarter comes to show why the coffee giant’s shares have struggled — year to date, Starbucks stock is down nearly 8%, but it’s also down 4% over the past twelve months., Until the turnaround plan delivers more than aroma, the stock might stay in drip-mode.