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Starbucks Stock Price Collapses

Starbucks, once a leading fast-food company, has experienced a significant decline in its share price due to high prices and inflation. The company’s earnings have been the primary reason for the share price’s downfall, with the stock falling 22% in the past year, while the S&P 500 has seen a 25% increase. Revenue fell 2% in the most recent period to $8.6 billion, and per-share earnings fell 14% to $.68. CEO Laxman Narasimhan acknowledged that Starbucks had plans to improve the numbers, but the reality is that there is nothing he can do about inflation and the belief that Americans’ buying power is shrinking. The University of Michigan’s Survey of Consumer Sentiment shows that Americans are worried about inflation, particularly compared to pre-pandemic levels. The consumer price index shows the cost of living has dropped to about 3% from 8% two years ago, but Starbucks’ challenge is that people don’t believe this.

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