Retail coffee chain Starbucks (SBUX) missed Wall Street’s forecasts across the board with its latest financial results as the company’s sales declined for a third consecutive quarter.
Seattle, Washington-based Starbucks posted earnings per share (EPS) of $0.80, which fell far short of the $1.02 consensus expectation of analysts. Revenue for the year’s third quarter totaled $9.07 billion, which was below the $9.37 billion forecast on Wall Street. Sales were down 3% from a year earlier.
Management blamed the poor results on declining sales in its home market of America, as well as in China, its biggest foreign market. However, despite the poor showing, SBUX stock was down less than 1% in after-hours trading, likely because the company released preliminary quarterly results on October 22 and said it was suspending its 2025 outlook.
Righting the Ship at Starbucks
Starbucks reported grim same-store sales for the quarter. Global same-store sales decreased 7%, while foot traffic to its stores worldwide fell 8% from a year ago. The company’s U.S. restaurants reported same-store sales declines of 6%, while in China, the company’s same-store sales plummeted 14%.
This quarterly print was the first under new CEO Brian Niccol, who joined the company on September 9 of this year and has been tasked with turning around the struggling business. In the company’s earnings statement, Niccol said, “It is clear we need to fundamentally change our strategy to win back customers.”
Niccol has already taken several actions to right the ship at Starbucks, including ending discount prices, focusing more on advertising, and making changes to the company’s executive ranks. SBUX stock has gained 8% this year, with most of that increase coming since news of Niccol’s appointment.
Is SBUX Stock a Buy?
Starbucks stock has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 15 Buy, seven Hold, and three Sell recommendations made in the last three months. The average SBUX price target of $101.60 implies 4.40% upside from current levels.
