Starbucks is set to report its fiscal Q3 earnings report as an activist investor is knocking on its door.
Q3 revenue fell 1% to $9.1 billion, lower than expectations of $9.20 billion, per Bloomberg consensus estimates.
"Cyclical macro issues" may be to to blame, per a note from Baird analyst David Tarantino prior to the results. He anticipated softness in the majority of fiscal 2024 sales as consumers pull back on discretionary spending, "including afternoon occasion at Starbucks." He has a Hold rating on shares.Menu display featuring Starbucks' new Iced Energy drinks, Melon Burst and Tropical Citrus, at a Starbucks location, San Francisco, Calif., June 28, 2024.
"Intense competition is the natural state of restaurant markets and even the strongest brands are not insulated," she said. "The direction of SBUX's China same-store sales growth is strongly correlated with those of other global brands. And all are correlated with macro factors .
Global and US same-store sales are expected to see a low single-digit decline or stay flat, down from the previous range of 4% to 6% growth. China's same-store sales are expected to see a single-digit decline, down from the previously expected low-single-digit growth.Starbucks declined to make CEO Laxman Narasimhan and CFO Rachel Ruggeri available for an interview.
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