Starbucks (NASDAQ: SBUX) posted weaker-than-expected second-quarter results on Tuesday, as softening consumer demand weighed on both sales and profitability. Shares slipped about 7% in pre-market trading following the release.
For the quarter, the coffee giant posted adjusted earnings per share (EPS) of $0.41, missing the consensus estimate of $0.48. Revenue for the period totaled $8.76 billion, also below analyst expectations of $8.89 billion.
Comparable store sales declined 1%, wider than the expected 0.6% drop, reflecting pressure from lower average ticket sizes—particularly in China, where average spend per customer fell 4%. In North America, comparable sales also declined 1%, while China was flat overall due to the drop in ticket size offsetting traffic gains.
Profitability came under significant strain during the quarter, as the global operating margin narrowed by 450 basis points year-over-year to 8.2%, contributing to a 38% decline in diluted EPS compared to the same period last year.
While performance lagged expectations, the company reiterated its commitment to the ongoing “Back to Starbucks” turnaround strategy, which focuses on revitalizing operations and unlocking future growth opportunities.
Ahead of the earnings report, Guggenheim Securities revised its outlook on the stock, cutting its price target from $95 to $83 while maintaining a Neutral rating.
Currently, the consensus rating on Starbucks stock is “Overweight” with an average price target of $98.59, which implies more than 16% potential upside from Tuesday’s closing price.
As of the latest update, Starbucks (NASDAQ: SBUX) shares are down 6.88%, trading at $79.01.
David Kirakosyan is a seasoned financial journalist with nearly a decade of hands-on experience in covering the U.S. stock markets. Since 2016, he has written thousands of equity news articles, detailed market analyses, and investment insights for trusted platforms like Benzinga, Investing.com, and StreetInsider. David holds a Master of Science in Finance and is a Level 2 CFA® candidate, reflecting his deep commitment to financial expertise and ethical standards. His reporting combines real-world market experience with a strong academic foundation, helping readers make informed decisions backed by reliable information. Read Full Bio
