Been following SBUX closely and it keeps falling. I lost some money on it earlier this year thinking it would recover.
What is behind these drops? Every few months, another decline shows up. Should I just steer clear of it?
Made the same mistake with SBUX back in 2022 when I thought it hit bottom at $85. Lost about $400 on that trade.
Their earnings keep disappointing because mobile orders are down and people aren’t paying $6 for coffee anymore. Management keeps making excuses about China but their US stores look empty too.
I avoid retail stocks now after getting burned multiple times trying to time recoveries.
Key factors hitting SBUX:
• Q3 2024 revenue down 1% year-over-year
• Comparable store sales declined 3% globally
• China operations dropped 14%
• Traffic patterns still below pre-2020 levels
Data shows consistent underperformance across quarters.
SBUX faces real challenges that impact its stock. Growth in China has slowed significantly, which is a key revenue area. Rising labor costs and union pressures are complicating things further.
Same-store sales are not growing as they used to. Local shops and other chains are taking some of their market share.
It’s wise to look for clear signs of a turnaround before investing again. The stock might seem cheap, but trying to catch a falling knife usually ends badly. There are better opportunities out there in other sectors.
Competition from cheaper coffee places and shifting consumer habits is hurting SBUX. Many are working from home, resulting in less traffic at office locations.
International expansion is also not going well. High inflation makes premium prices less appealing to regular customers.
It may be wise to hold off until they demonstrate steady quarterly improvements. The food and beverage sector is quite unpredictable at this moment.