The shares of Starbucks have dipped more than 4% in the after-market trading after the coffeehouse chain shared its preliminary earnings for the fourth quarter, which fell short of expectations and showed declining sales in key markets, including North America.
Starbucks reported $9.1 billion in revenue, which marked a 3% year-over-year drop and was below the $9.38 billion estimated by analysts. The adjusted earnings per share of $0.80 also missed expectations of $1.03 in EPS while coming 24% lower compared to the same period last year.
More concerning was Starbucks’ continued sales slump, which now extends to three consecutive quarters. The company recorded a 7% year-over-year decline in same-store sales, including a 6% decline in North America. In China, which is Starbucks’ second biggest market, the sales decreased even further to 14%.
Starbucks will report its official fourth-quarter earnings and full-year results on October 30. The company also nixed its guidance for next year, attributing the move to transition under new CEO Brian Niccol.
“Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth, and that’s exactly what we are doing with our ‘Back to Starbucks’ plan,” Niccol said in a statement.
Starbucks’ stock closed at $96.82 per share on Tuesday and was 3.36% up year-to-date at that point. After the preliminary earnings were made public, the stock plunged by 4.15% and traded at $92.80 per share.