America’s largest caffeinated beverage export Starbucks Corp (NASDAQ:SBUX, ETR:SRB) faced a post-market reckoning after a roundly disappointing second quarter.
Consolidated net revenues decreased by 2% year on year to $8.6 billion, slightly down from last year, with China posting a particularly underwhelming 11% sales decline.
Statutory earnings per share declined 14% to $0.68, while operating margins fell 240 basis points, partially due to increased promotional activities, higher wages and increased administrative costs.
Chief executive Laxman Narasimhan acknowledged the results did not meet expectations and “do not reflect the power of our brand, our capabilities or the opportunities ahead”.
“It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us,” he added.
Shares were trading more than 12% lower in the Wednesday's premarket.