CA - Starbucks: The Coffee Giant Gets Crippled On Horrible Earnings

2024-05-01 15:30:41 ET

Summary

• Starbucks Q2 earnings show a surprise sales decline and a significant revenue miss, indicating that consumers are cutting back on spending.
• Comparable sales for the entire company were down 4.0%, with a 6% decline in total transactions.
• Operating margins also narrowed, with international operating margins experiencing a significant decline of 370 basis points.
• The company has a lot of work to do, but now offers a 3.2% yield and valuation has been reset.

We have been feeling cautious about restaurant stocks the last two months, and have been encouraging profit taking in the space in our public articles, and at our investing group. This has been met with pushback, as no one likes to hear that their stocks should be sold, but thus far this has proven to be correct, with a combination of a weaker market, and signs that consumers are simply exhausted from high prices....

For further details see: