Starbucks Stock Drops After Latest Results Disappoint

Shares of Starbucks (SBUX) dropped Wednesday, sliding after the coffee giant’s latest results disappointed and its new CFO declined to offer an outlook for the months to come. 

Starbucks stock was down more than 8% in early trading Wednesday, a move that has the shares off roughly 15% this year. The company last night reported fiscal second-quarter financial results that were below Wall Street’s expectations—and were “disappointing,” according to comments on a Tuesday evening conference call last night from CEO Brian Niccol, who joined from Chipotle last year.

The company, which is busy with a wide-ranging turnaround effort, named Cathy Smith its CFO earlier this year; Smith on the call said she was ”still learning the business, and it would be premature for me to provide such insight,” according to a transcript made available by AlphaSense. 

“While our financial results are far from Starbucks’ potential, I am confident we have the right strategy,” Smith said.

Wall Street analysts are somewhat lukewarm on the company’s shares these days. Visible Alpha’s consensus price target a bit below $92 is an 8% premium to Tuesday’s close, but that would still be below the stock’s 52-week high a few bucks under $120, seen earlier this year—and closer to 52-week lows above $70.

“We acknowledge visibility into near-term numbers is low,” wrote Deutsche Bank analysts, whose $97 price target is a bit higher than the average. “We believe Starbucks is making the right investments for the business long term, supporting our high conviction in the success of the turnaround.”