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Starbucks is reportedly facing historical losses in its stock prices as its sales performance has been weak. The company is said to have experienced a slump, causing its market value to plummet by almost $12 billion. This is said to equate to a 10% decrease.
As per PYMNTS, the latest decline is so far the longest losing streak for the coffee chain since it went public 31 years ago. Business analysts opined that the decline is due to a "material slowing" in sales trends. In any case, it was said that the slowdown came shortly after Starbucks attained strong comparable sales growth of eight percent in the fourth quarter.
Plunging Sales Trends
It was said that Starbucks shares initially picked up last month after a better-than-expected quarterly result on top of a positive sales prediction for fiscal 2024. But then, concerns about slow sales trends have caused the share prices to drop. The slow sales in China have also contributed to this result.
It was added that the overall snack and coffee industry experienced a reduction in sales trends, and Starbucks is said to have played a major part in this slowdown. Now, investors are reportedly worried because the restaurant may not be able to meet the consensus expectations for U.S. comparable sales in the present quarter.
Lower Sales Prediction for Starbucks
Meanwhile, Bloomberg reported that JPMorgan Chase & Co. analyst, John Ivankoe, has lowered his first-quarter U.S. comparable sales estimate for Starbucks by 4%. He also noted that the brand's recent holiday promotion was not as successful as the previous year in the same period.
He initially expected a six percent increase in Starbucks' share price in quarterly local same-store sales, but with the current sales performance, he just lowered his sales forecast.
