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Starbucks recently slashed its full-year guidance, and its stock plunged 16% following the release of its Q2 FY24 earnings report (ending in March).
Howard Schultz, who spent decades building Starbucks into a global powerhouse, stepped down in May 2023. In a candid LinkedIn post after the earnings miss, Schultz expressed his concerns:
“At any company that misses badly, there must be contrition and renewed focus and discipline on the core. Own the shortcoming without the slightest semblance of an excuse.”
Schultz attributes the company's "fall from grace" to the deteriorating customer experience in US stores, but the challenges run deeper.
Let’s explore Starbucks' latest trends and issues from three perspectives: the roots of an ongoing boycott, the exodus of US members, and a price war in China.
Today at a glance:
Q2 FY24 Earnings.
The Boycott Impact.
US Members Exodus.
Price War in China.
1. Starbucks Q2 FY24 Earnings
Key metrics you should know:
Same-store sales: Revenue growth excluding new stores, impacted by average ticket (amount paid per visit) and transactions (total number of visits).
Active Rewards Memberships: Number of loyalty members in the US.