Starbucks (NASDAQ: SBUX) announced on Tuesday that it is withdrawing its annual financial forecast, reflecting the challenges the company faces as customer interest declines and performance in key markets falters. This decision coincides with Brian Niccol taking over as the new CEO, succeeding Laxman Narasimhan, with a focus on revitalizing the brand and re-engaging customers.
Following the announcement, Starbucks’ stock dropped about 6% in after-hours trading, while the company expects a decline in sales and profits for the current quarter.
These changes come at a critical time for the company, particularly with significant challenges in its two largest markets, the United States and China. CFO Rachel Ruggeri expressed concerns over recent trends, stating, “Despite our significant investments, we have not been able to reverse the decline in customer traffic, which has pressured both our revenues and profits.” She also noted that while there are plans to address these issues, the expected turnaround will take some time.
