(Bloomberg) -- Starbucks Corp. shares suffer a record run of losses as concern builds that sales trends at the coffee giant have cooled in recent weeks.
The stock dropped 1.6% on Monday, declining for a 11th consecutive session in what is the longest rout since Starbucks’ public debut in 1992. In total, the slump has erased 9.4% of Starbucks’ market value, a decline of nearly $12 billion.
Third-party sales data signaled a “material slowing” at Starbucks in November after the coffee giant delivered strong comparable sales growth of 8% in the fiscal fourth quarter, JPMorgan Chase & Co. analyst John Ivankoe wrote in a note Monday.
Ivankoe lowered his first-quarter US comparable sales estimate to 4% growth compared with the year ago period, to reflect what may be a less successful Christmas holiday promotion than the fall Pumpkin Spice Latte event. He had been expecting a 6% jump in quarterly domestic same-store sales.
Starbucks shares rallied in the first half of November, after the coffee company reported quarterly results that topped expectations and provided a better-than-feared sales outlook for fiscal 2024. But the stock has fallen for the past two weeks amid concern about “still-slow China data” and sales trends, according to Ivankoe, who has an overweight rating on the stock.
Wedbush Securities Inc. analyst Nick Setyan said investors are nervous that US comparable sales may fall short of consensus expectations in the current quarter as credit-card data have signaled a slowdown over the past three weeks or so. He has a neutral rating on Starbucks, calling the stock one of the most sensitive to signs of consumer weakness.
Sales trends in the snack and coffee industry have decelerated on a week-over-week basis for the seven-day period through Nov. 19, according to data-driven research firm M Science. The sales slowdown was driven by softer trends at Starbucks, analyst Matthew Goodman wrote in a note on Dec. 1. This marks the third straight week of decelerating trends amid boycotts and recent labor strikes, including on Red Cup Day (Nov. 16), which affected as many as 200 locations in the US.
Shares of Starbucks are down 1.6% this year compared with a 11% gain for the S&P 1500 Composite Restaurants Index.
(Updates with closing prices)
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