Starbucks' stock continues to struggle as competition heats up in the US, overseas

Yahoo Finance03-27

Starbucks (SBUX) is looking to find its footing amid a sea of rising global competition. Shares of the coffee chain are struggling as the company is being hit on multiple fronts, including a pullback ...

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Last year, its advertising expenses came in at $508 million globally.However, gaining share won't be easy in a competitive US market. Upstart drive-thru coffee chain Dutch Bros is already offering energy drinks, which make up roughly 20% to 25% of its total sales, acc","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4535":"淡马锡持仓","LU1430594728.SGD":"Eastspring Investments - Global Low Volatility Equity AS SGD","MCD":"麦当劳","BK4588":"碎股","BK4550":"红杉资本持仓","LU1244550221.USD":"FRANKLIN GLOBAL MULTI-ASSET  INCOME \"A\" (USDHEDGED) INC (M)","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU1244550577.SGD":"FTIF - Franklin Global Multi-Asset Income A (Mdis) SGD-H1","LU1718418525.SGD":"JPMorgan Investment Funds - Global Select Equity A (acc) SGD","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","LU0882574139.USD":"富达环球消费行业基金A ACC","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU1585245621.USD":"EASTSPRING INV GLOBAL LOW VOLATILITY EQUITY FUND \"A\" (USD) ACC B","LU1244550494.USD":"FRANKLIN GLOBAL MULTI-ASSET INCOME \"A\" (USDHEDGED) ACC","BK4581":"高盛持仓","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","BK4504":"桥水持仓","BK4209":"餐馆","YUM":"百胜餐饮集团","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0823411888.USD":"法巴消费创新基金 Cap","DNUT":"Krispy Kreme, Inc.","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","SBUX":"星巴克","BK4539":"次新股","LU2265009873.SGD":"Eastspring Investments - Global Growth Equity AS SGD-H","WEN":"温蒂汉堡","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","LKNCY":"瑞幸咖啡","QSR":"餐饮品牌国际","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4566":"资本集团"},"translate_title":"随着美国和海外市场竞争的升温，星巴克的股价仍在挣扎","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LKNCY":1,"YUM":1,"SBUX":1,"QSR":1,"MCD":1,"DNUT":1,"WEN":0.9},"content_text":"Starbucks (SBUX) is looking to find its footing amid a sea of rising global competition.\nShares of the coffee chain are struggling as the company is being hit on multiple fronts, including a pullback in occasional visits in the US, cautious consumers in China, and increasing investments in coffee from players big and small.\nThe ongoing Middle East conflict presents another headwind, which prompted CEO Laxman Narasimhan to share his concerns about misinformation being spread about the company in an internal memo.\nYear to date, shares of Starbucks are 3%, compared to the S&P 500's (^GSPC) 10% gain. \nThough the company is facing an uphill climb, Deutsche Bank analyst Lauren Silberman tells Yahoo Finance that the worst is over for the stock. \"We see limited downside and believe the risk and reward is skewed to the upside\" moving forward, said Silberman. \nIt'll take time to bring customers back in, but Starbucks can turn things around with product innovation, particularly those geared towards Gen Z and millennial customers, added Silberman.\nThat includes the launch of three new beverage flavors this fiscal year, including its first, lavender, on March 7.\n\"Some of their early Instagram posts...introducing lavender...was some of the best engagement that I've seen on Starbucks posts in a very long time,\" Silberman said. \"Lavender in itself seems to be a growing trend popular with the younger consumer, \"\nIn the US, Starbucks is shifting more of its marketing budget to social media to reach Gen Zs and millennials, which make up approximately 51% of its customer base, per a client note from TD Cowen analyst Andrew Charles. Last year, its advertising expenses came in at $508 million globally. \nThe company is exploring energy beverages, which can help attract younger drinkers and afternoon visitors, according to Charles. It's working to improve US and China same store sales, but management has projected fiscal Q2 to have soft revenue growth. \n\n\n\n  HANGZHOU, CHINA - FEBRUARY 25, 2024 - Photo taken on Feb 25, 2024 shows a nearby Luckin Coffee and Starbucks store in Hangzhou, East China's Zhejiang province. (Photo credit should read CFOTO/Future Publishing via Getty Images)\n \n\n  Future Publishing via Getty Images\n \n\nHowever, gaining share won't be easy in a competitive US market. Upstart drive-thru coffee chain Dutch Bros is already offering energy drinks, which make up roughly 20% to 25% of its total sales, according to Charles' note. \nIn February, Dunkin' also launched a new line of iced energy drinks, SPARKD'.\nSo far Dutch Bros and Starbucks are not hurting one another, William Blair analyst Sharon Zackfia told Yahoo Finance back in January, adding that the overall coffee business typically has \"exceptional\" margins.\nThose margins are drawing fast food giants like McDonald's (MCD), Wendy's (WEN,) Burger King (QSR), and Taco Bell (YUM), into the breakfast game. \nMcDonald's, which launched its first drive-thru beverage and breakfast restaurant CosMc's last December, announced on Tuesday that it's partnering with Krispy Kreme (DNUT) to sell its donuts at all restaurants nationwide by 2026. \nSilberman said Starbucks isn't \"meaningfully losing share\" in the growing coffee and beverages category, and there can be room for everyone as the industry continues to expand. \n\nBut the coffee chain is also facing increasing competition in China, where it has announced major growth ambitions. \nStarbucks has built up its presence in the country over the past 25 years, opening its first store in Beijing in 1999. Last September, Starbucks announced its 20,000th location outside of North America, and plans to expand to 9,000 stores in China in the next two years. \nThe company has also invested in building an ecosystem, announcing the opening of its $220 million China Coffee Innovation Park manufacturing facility last fall.\nExecutives at the helm are making the case that the Asian market is a long-term play. \n\"China's coffee market is still in its early stages, with huge potential to expand the addressable market,\" Starbucks China CEO Belinda Wong said during Starbucks' 2022 Investor Day. \"Per capita demand for coffee in China will grow further from 12 cups per year to 14 cups by 2025.\"\nHowever, local independent coffee shops and discount chains like Beijing-based Luckin' Coffee (LKNCY) present a challenge to Starbucks' plans, particularly as the Chinese economy slows down. \n\"The China environment remains promotional, which Starbucks is trying to balance with targeted offers ... while trying to maintain the brand's premium positioning,\" wrote Charles. \"We anticipate intense market share competition to linger in China for the foreseeable future.\"\n—\nBrooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.\nClick here for the latest stock market news and in-depth analysis, including events that move stocks\nRead the latest financial and business news from Yahoo Finance","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2422992259"}