starbucks (stocks/sbux”>SEX) stocks reported worse-than-expected preliminary fourth-quarter results, showing a revenue decline of 3% year-over-year to $9.1 billion and a 24% drop in adjusted earnings per share, now sitting at $0.80.
The quick response from investors in the form of a more than 5% drop in premarket trading on Wednesday was caused by the weak numbers and the announcement of Starbucks' suspension of fiscal 2025 guidance as it passes to former Chipotle (CMG) CEO Brian Niccol.
U.S. same-stores reported a 6% decline in sales during the quarter, which is a clear turnaround for Starbucks. A 10% drop in foot traffic and a 4% increase in average ticket size were indicative of the company's problem maintaining customer numbers.
A recent promotion on the app, including its pairing menu offering discounts on coffee and breakfast items, failed to improve customer engagement, the company said.
Starbucks reports a 14% drop in sales in China
China, the main driver of growth for the Starbucks brand, was experiencing a very pronounced decline. Same-store sales fell 14% due to a 6% reduction in footfall and an 8% deflation in ticket sizes. Starbucks shared the fact that the poor performance was due to a dual cause: a “soft macroeconomic environment” and competition, thus reinforcing barriers to international operations.
Although there was a quarterly slowdown, Starbucks Stock had risen 3% so far this year and 10% in the last six months, mainly due to optimism linked to Niccol's arrival. like him official fourth quarter and full-year results should be released after the market close on October 30, investors will be looking for any sign of a possible comeback strategy from new leadership.
Starbucks Stock Chart Analysis
SBUX/USD 15-minute chart
starbucks Corporation (SBUX), through the 15-minute chart we could see that this stock is moving in the narrow range zone with a certain degree of volatility but without a clear direction. On October 31, Starbucks price was $97.35, which recorded a very small gain of 0.07%. Recently, the stock has tested resistance around $99, while the support area lies at $93.69.
The sideways movement shows that market participants are still undecided and that neither the bulls nor the bears are in full control.
RSI signals limited momentum, key levels in focus
The Relative Strength Index (RSI) It now stands at 45.66, which means its position is neutral, with a slight bearish bias. The RSI has remained below the 50 threshold, without crossing extreme levels, indicating limited momentum. This aligns with the orderly price movement we have observed, as the RSI has remained balanced between the 30 and 70 boundaries without prolonged overbought or oversold conditions.
In the short term, we can anticipate that Starbucks will continue to move in this range, with potential resistance between $98 and $99 and support stabilizing near $93.69.
If the price significantly surpasses the $99 mark, it may pave the way for further gains, while if it falls below $93.69, it is a possible indication of a possible longer period. However, at this point, one should watch the volume as a likely early sign of a breakout in either direction.
Will Starbucks finally break out of its vicious cycle and become world-class again? Keep an eye on the $99 level as well as the $93.69 level. A move in either direction could be a game-changer. Follow us for more updates.
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