Reuters: Global Markets: Starbucks shares slump 11 percent after earnings miss

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Starbucks shares slump 11 percent after earnings miss Jul 27th 2012, 15:35 Tweet Share this Email Print Related News Starbucks cuts view, U.S. slows; shares sink Thu, Jul 26 2012 Pain in Spain hits Wall Street, Texas Instruments off late Mon, Jul 23 2012 McDonald's second-quarter profit falls, shares slide Mon, Jul 23 2012 Germany's Benckiser to buy Peet's Coffee for $1 billion Mon, Jul 23 2012 Chipotle restaurant sales miss estimate, shares tumble Thu, Jul 19 2012 Related Topics Hot Stocks » Asian Markets » Starbucks logo is seen outside the new Starbucks cafe in Warsaw March 6, 2011. Credit: Reuters/Kacper Pempel Fri Jul 27, 2012 11:35am EDT (Reuters) - Starbucks Corp (SBUX.O) shares slid more than 11 percent Friday, in their biggest one-day drop in 12 years, after it missed quarterly profit expectations and cut its outlook as visits to its U.S. coffee shops dwindled. The world's largest coffee chain said on Thursday that store traffic was "noticeably down" in many areas across the United States in a sluggish pattern that began in June and continued in July. The company missed Wall Street's quarterly profit estimate by 2 cents a share, a rarity for one of the food industry's top performers that, along with disappointing results from Chipotle Mexican Grill Inc (CMG.N) and McDonald's Corp (MCD.N), has stoked fears about a revision of growth expectations for the sector. "I'd be cautious right now," Investment Technology Group Inc research analyst Steve West said. "They're all high-valuation stocks. It's live by the sword, die by the sword." Starbucks shares were down $5.78, or 11 percent, at $46.63 on Nasdaq. The stock had appreciated nearly 14 percent in the year to date, before its results were announced Thursday. It was rated "Buy" by 16 analysts, "Outperform" by seven, "Hold" by six and "Underperform" by one. There are no "Sell" ratings on the stock. Despite the disappointing results, most analysts stuck to their ratings, citing Starbucks' ongoing efforts to diversify its revenue beyond coffee drinks bought at stores. The company recently launched a line of Refreshers fruit drinks, and is working on its own single-serve coffee brewers. It also has single-serve "K-Cups" for Green Mountain Coffee Roasters Inc's (GMCR.O) Keurig brewers and a line of instant coffee. "They're proactive in the things they're doing," said Williams Capital Group analyst Marc Riddick, who has a "Buy" rating on the shares. (Reporting by Martinne Geller in New York. Additional reporting by Lisa Baertlein in Los Angeles; Editing by Bernadette Baum) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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