Starbucks CEO's Dilemma Unfolds With Stock Performance, Falling Sales
Portfolio Pulse from Shivani Kumaresan
Starbucks Corp. (NASDAQ:SBUX) CEO Laxman Narasimhan faces challenges as shares drop 18% after a disappointing quarterly report, marking the first sales decline since late 2020. Efforts to improve include enhancing service efficiency, offering discounts, introducing new products, and expanding food offerings. Despite these efforts, Starbucks has lowered its full-year revenue growth forecast and expects flat adjusted earnings per share. Analysts are skeptical about a quick recovery, citing concerns over pricing strategy and menu complexity. Starbucks stock has lost over 34% in the last 12 months, affecting investors in SBUX directly and indirectly through ETFs like Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and Vanguard Total Stock Market Index Fund ETF (NYSE:VTI).
May 02, 2024 | 8:11 pm
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NEGATIVE IMPACT
Starbucks' disappointing quarterly performance and first sales decline since late 2020 have led to a significant share price drop, with a 34% loss over the last 12 months.
The direct mention of Starbucks' poor quarterly performance and sales decline, along with a significant share price drop, indicates a negative short-term impact on SBUX stock.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100
NEGATIVE IMPACT
Vanguard Total Stock Market Index Fund ETF (NYSE:VTI) holders face indirect impact from Starbucks' declining performance, as SBUX is part of the ETF's diversified portfolio.
Starbucks is part of VTI's broad market index, meaning its stock performance downturn indirectly influences the ETF's overall performance.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
Investors in the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) are indirectly affected by Starbucks' performance due to its inclusion in the ETF.
Given Starbucks' significant role in the consumer discretionary sector, its poor performance and stock decline indirectly affect XLY's performance.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70