Starbucks Plunges 6.93% on Earnings Miss

On April 30, 2025, Starbucks' stock price dropped by 6.93% in pre-market trading, reflecting investor concerns over the company's recent financial performance.

Starbucks reported earnings and revenue surprises of -16.33% and 0.31%, respectively, for the quarter ended March 2025. The company's revenue for the quarter was $8.76 billion, representing a year-over-year increase of 2.3%. However, the company's net income dropped 50% to $384 million in its fiscal second quarter, with adjusted earnings falling nearly 40% to 41 cents per share.

During the earnings call, Starbucks highlighted that its global net new store growth was 213 coffeehouses, but global comparable store sales declined by 1%. The global operating margin stood at 8.2%, and the operating income decreased to $748.3 million compared to $1.1 billion in the previous year. The operating margin contracted from 18.0% in the prior year to 11.6% in the current quarter.

Despite the challenging quarter, Starbucks maintained that its turnaround strategy is on track. However, the disappointing financial results and the decline in same-store sales have raised questions about the effectiveness of CEO Lazzarino Niccol's strategy. The company's stock price decline in pre-market trading suggests that investors are cautious about the company's future prospects.