Starbucks has issued a strict return-to-office mandate for corporate staff under the newly-instilled CEO Brian Niccol. The news was first reported by the Wall Street Journal, which also noted that employees who failed to comply will be asked to leave. The company seeks to implement a uniform process to hold employees accountable with consequences leading “up to, and including, separation.”
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Starbucks Insists on Work from Office
Starbucks has had the hybrid work policy in place since the onset of the COVID-19 pandemic. Since 2023, employees have been asked to attend the office thrice a week, with Tuesday being a compulsory common day for all. According to the latest mandate, Tuesday will cease to be a compulsory common day and team heads can decide on the best common days for respective teams.
Starbucks’ decision follows similar actions taken by Amazon (AMZN) and other corporate majors who have made working from the office for a greater number of days a compulsion. Interestingly, Niccol himself uses the company’s corporate jet to travel from his California home to the headquarters in Seattle, an act that has been heavily criticized by employees and investors.
Starbucks’ Q4 Results on Deck
Starbucks is scheduled to report its Q4 FY24 results today, after the market closes. Unfortunately, the coffee chain’s preliminary fourth-quarter results and suspended guidance marred investor confidence in the stock. Starbucks’ preliminary figures for Q4 FY24 adjusted earnings per share (EPS) of $0.80 and sales of $9.10 billion came in below analysts’ estimates.
Headwinds from intense competition in China, falling sales in the U.S., and macro problems have impacted Starbucks’ performance.
Starbucks’ Website Visits Hinted at Declining Sales
Considering the declining traffic on Starbucks’ website and apps, investors could have easily projected its declining quarterly sales. Based on TipRanks’ Website Traffic tool, the total estimated visits to all of Starbucks’ websites and apps collapsed 31.77% in the September quarter compared to the prior year.
A study of a company’s website traffic trends can disclose meaningful information about a particular period’s performance and help gauge the stock price movement.
Is SBUX Stock a Good Buy?
Wall Street remains divided on Starbucks stock owing to the continued challenges. On TipRanks, SBUX stock has a Moderate Buy consensus rating based on 15 Buys, seven Holds, and three Sell ratings. Also, the average Starbucks stock price target of $101.60 implies 4.3% upside potential from current levels. Year-to-date, SBUX stock has gained 3.4%.
