Starbucks Stock Slumps as Trading Volume Plunges 33.5% Amid Rising Rivals and Market Underperformance

On September 4, 2025, Starbucks (SBUX) closed at $87.01, down 0.28%, with a trading volume of $590 million, a 33.54% decline from the previous day. The stock’s underperformance reflects ongoing challenges highlighted in recent analyses.

A bearish thesis on Starbucks emphasizes long-term risks, including store oversaturation, aging locations, and a debt load of $28 billion. While free cash flow supports debt management, the company’s focus on short-term profitability over innovation risks weakening its brand strength. Dutch Bros, a fast-growing competitor, has outpaced Starbucks in recent stock performance, with a 153.1x P/E ratio versus Starbucks’ 38.0x. This underscores shifting consumer preferences and competitive pressures in the coffee sector.

Investor sentiment has cooled, with hedge fund holdings in SBUX dropping from 84 to 70 in the first quarter of 2025. Analysts note that Starbucks’ dividend yield, while attractive, pales against current 4-5% CD rates. The company’s recent decision to reduce US production days highlights cost-cutting measures amid weaker demand, further signaling operational headwinds.

Backtest results indicate that a $10,000 investment in Starbucks three years prior would have yielded approximately $12,650 as of September 4, 2025, trailing the S&P 500’s 65.69% return over the same period. This underperformance underscores the stock’s struggle to keep pace with broader market gains amid structural challenges.