Starbucks (SBUX) Shares Drop 1.65% on Restructuring Fears, Six-Day Slide to 9.52%

Starbucks (SBUX) shares plunged 1.65% on October 10, marking a six-day losing streak with a total decline of 9.52%. The stock hit its lowest level since April 2025, with an intraday drop of 1.72%, as investors grappled with the company’s aggressive restructuring and uncertain near-term prospects. The selloff reflects growing skepticism about CEO Brian Niccol’s strategic overhaul, which prioritizes cost-cutting over rapid expansion.

A $1 billion restructuring plan, announced in late August, has become a focal point of investor concern. The initiative includes closing 500 North American stores and laying off 900 non-retail employees, signaling a shift from aggressive growth to a “quality-over-quantity” approach. While the company aims to enhance customer experience through store renovations and operational efficiency, the immediate financial burden of restructuring costs—split between $150 million for severance and $850 million for store closures—has heightened short-term risks. Same-store sales have declined for six consecutive quarters, underscoring the challenge of reversing momentum in a competitive market.

Upcoming fourth-quarter earnings, expected to show a 28.8% year-over-year drop in EPS despite 3.6% revenue growth, further fuels investor anxiety. The projected earnings contraction highlights the tension between cost-cutting measures and maintaining profitability. Meanwhile, labor dynamics add complexity. The Starbucks Workers United union has pushed for “effects bargaining” to address impacts on affected employees, while the company pledges to rehire laid-off workers as new stores open. Balancing operational discipline with employee retention remains a delicate balancing act.

Competitive pressures also weigh on the stock. Rivals like Dunkin’ have capitalized on value-driven strategies, challenging Starbucks’ premium positioning. Seasonal product launches, such as the Pumpkin Spice Latte, aim to reinvigorate customer engagement, but their impact on sales remains unproven. With the S&P 500 outperforming SBUX by 22.78% year-to-date, investors are increasingly wary of the company’s ability to restore pre-pandemic growth without compromising its brand identity. The coming months will test Niccol’s “Back to Starbucks” strategy, as the market weighs near-term pain against long-term potential.