Starbucks lowers guidance, promises new drinks and deals after customer traffic fell in weak Q2

Starbucks lowered expectations for its full-year sales and profit Tuesday after a disastrous quarter that saw a slowdown in store visits across the world.

The Seattle coffee giant said revenue for the January-March period dropped 2% to $8.56 billion. That was far short of Wall Street’s forecast of $9.12 billion, according to analysts polled by FactSet. It was the first time since the end of 2020 that the company saw a drop in quarterly revenue.

“Our performance this quarter was disappointing and did not meet our expectations,” Starbucks CEO Laxman Narasimhan said during a conference call with investors. Shares in Starbucks Corp. tumbled 12% Tuesday in after-hours trading.

Starbucks said a mix of issues impacted sales. In the U.S., the company saw a sharper and faster decline in consumer confidence and spending than it had anticipated. The Conference Board, a business research group, said Tuesday that U.S. consumer confidence fell for the third straight month in April as consumers continue to confront elevated prices and high interest rates.