Rabat – Starbucks is grappling with an unprecedented financial setback, following a record 11-day losing streak for its stock. The decline, wiping out 9.4% of Starbucks’ market value (approximately $11 billion), is attributed to various factors, including a failed Christmas campaign, sluggish sales in China, and investor concerns over recent boycotts and labor strikes.
Starbucks stock has now fallen in value for more than 11 consecutive days, a record in the company’s history. The major factor appears to revolve around poor sales in its main US market, where inflation has severely hampered the purchasing power of its customers.
Despite an initial boost in early November due to better-than-expected quarterly results and a positive sales outlook for 2024, Starbucks shares have been on a downward trajectory over the past two weeks. The decline is linked to three consecutive weeks of reduced sales, influenced by boycotts and labor strikes, notably the Red Cup Day strike impacting around 200 US locations
Analysts express concerns about Starbucks’ cooling trends, particularly the potential shortfall in US comparable sales for the current quarter. The recent slump raises concerns among investors, with Wedbush Securities Inc. analyst Nick Setyan citing fears about sales falling short of expectations, as indicated by credit-card data signaling a slowdown over the past three weeks.
A potential factor in the recent downturn is the boycott of Starbucks, part of a broader movement against global brands allegedly supporting the Israeli occupation’s aggression against the Gaza Strip.
This boycott amplifies long standing calls for a Starbucks boycott, given former CEO Howard Schultz’s vocal support for the Israeli Occupation. Overall, Starbucks finds itself in a challenging period, prompting increased investor unease amidst the company’s record-breaking losses.
Source : Morocco World News
