By Zanub Saeed
Due to slowed sales at stores across the country, Starbucks corporation was found to have dropped 11 percent in shares on Friday, its biggest one-day drop in 12 years, reported Reuters.
Apparently the number of customers visiting Starbucks for their coffee and caffeinated drinks decreased in June and July, said Reuters, and that traffic into the store was "noticeably down." Starbucks was found to miss its quarterly profit expectations by just two cents a share. Starbucks wasn't the only major food and drink industry suffering recently, as McDonald's Corp and Chipotle Mexican Grill Inc released disappointing quarterly numbers as well, said Reuters.
"I'd be cautious right now," Investment Technology Group Inc research analyst Steve West told Reuters this week. "They're all high-valuation stocks. It's live by the sword, die by the sword."
Starbucks, which was reportedly rated "Buy" by 16 analysts, "Outperform" by seven, "Hold" by six and "Underperformed by one analyst," listed Reuters, had its shares decrease by $5.78, or about 11 percent, by Friday, at $46. 63 on Nasdaq.
Even with new franchises opening from the Starbucks brand like Evo fruit drinks and the upcoming opening of the first Tazo tea shop, customer number declined.
"They're proactive in the things they're doing," said Williams Capital Group analyst Marc Riddick, who had a "Buy" rating on the shares, said Reuters.
