Starbucks Loses $11 billion in Value Amid Boycotts

Starbucks has been facing boycotts ever since the Israel-Palestine conflict. In Malaysia, the number of visitors has been declining ever since. During September, just before the conflict, the Starbucks Puchong outlet was found to have a favorable gross profit margin of up to 70%, roughly RM54,440 in a month, according to Adrian, a Malaysian content creator and entrepreneur. He told the World of Buzz about it.

According to FMT, the stock experienced a 1.6% decline on Monday, for the 11th consecutive session of reductions and the most significant drop since Starbucks went public in 1992. In total, this downturn has erased 9.4% of Starbucks’ market value, resulting in a loss of nearly US$12 billion.

In the previous month, in November, Starbucks experienced a notable slowdown in sales, according to third-party data, following strong 8% growth in the fiscal fourth quarter.

Despite the predicted 8% growth, Starbucks has offered Christmas deals available almost every day throughout December until the year’s end amid the sales slowdown. Analyst John Ivankoe of JPMorgan Chase & Co. has adjusted estimates, foreseeing the Christmas holiday promo as potentially less successful.

This outcome is linked to Ivankoe’s revised first-quarter estimate for Starbucks’ comparable sales growth in the US, set at 4%. Starbucks shares initially rose after a positive quarterly report but have declined amid worries about slow data in China and sales trends.

Due to this, investors are cautious about the potential underperformance in US comparable sales for the current quarter, and the industry has seen a slowdown in the week-over-week sales trend, particularly at Starbucks locations affected by boycotts and strikes. Starbucks shares are down 1.6% for the year, contrasting with an 11% gain for the S&P 1500 Composite Restaurants Index.

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