Starbucks shares dropped for a record 11 consecutive business days between Nov. 16th and December 5th, erasing 9.4 percent or roughly $12 billion in market value.
This is the longest decline in Starbucks stock history since it went public in 1992, according to Bloomberg. This follows a decline of sales trends at the company reported in recent weeks.
Starbucks’s stock dropped for an 11th straight session. It's the longest rout since the company went public in 1992.
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The “material slowing” in sales was reported by JPMorgan Chase & Co. analyst John Ivankoe in a statement Monday. While the fourth quarter of the fiscal year showed a comparable growth of 8 percent, Ivankoe is reporting a decline to just 4 percent this quarter. He had predicted a 6 percent jump. Sales declined on a week-over-week basis for the seven day block of time through Nov. 19th, coinciding with the stock drop.
The decline in stock was in part attributable to “still-slow China” data, according to the analyst. There is also the fact that Starbucks has been dealing with boycotts from Palestine supporters and employee strikes led by Starbucks union, which has led to staffing problems at approximately 200 locations in the US.
According to Bloomberg, this is Starbucks’ third straight week of “decelerating trends amid boycotts and recent labor strikes.”
Starbucks union workers called for a strike on “Red Cup Day,” the annual launch of the Starbucks’ seasonal holiday cup which represents one of the biggest yearly marketing events of the coffee chain. The strike caused the largest work stoppage in the company’s five-decade history.
According to labor news website The Stand, over the past two years some 368 Starbucks stores in 42 states and 24 Starbucks stores in Washington state alone have elected to join a union. However, Starbucks has refused to draw up a contract with the union and has pursued an anti-labor campaign against it through legal tactics and alleged illegal firings. “As Starbucks workers continue to organize and call out the company, is it any wonder that sales are suffering?” The Stand writes.
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