Famed coffee maker Starbucks experienced a series of woes in 2016, but none worse than the current stock slump that not only saw shares drop over eight percent but is causing the loss of over three thousand jobs.
On Friday, shares fell 8.2 percent to $54.63, which, according to Fortune, was “the biggest intraday plunge since August 2015.”
Along with the stock plunge, Starbucks was also forced to cut its profits forecast after having to confront the failure of its tea shop chain, Teavana. Bought for $620 million in 2012, Teavana is a chain of specialty tea shops operating mostly in shopping malls across the country. But the continued fall in foot traffic in malls was too much for Teavana to beat. The shuttering of the tea shops will cost the company 3,300 jobs, reports say.
Sales increased only 4 percent in the last quarter, failing to meet the 4.8 percent expected estimate, Fortune said.
Excluding some items, earnings amounted to 55 cents. That matched analysts’ estimates. Revenue climbed to $5.66 billion, short of the $5.76 billion projection. Starbucks sees profit for the full year at $2.05 to $2.06 a share, down from previous guidance range of $2.09 to $2.12.
Starbucks will likely turn with increased urgency to its expansion in China and its 1,300 outlets there.
“The growth opportunity in China is unparalleled,” said Kevin Johnson, the company’s chief executive officer.
Starbucks made news in January of this year after announcing it would hire 10,000 Muslim refugees in protest over President Donald Trump’s temporary halt to immigration from war-torn Muslim-majority countries. The announcement caused many customers to demand to know why the company would hire foreigners at the expense of Americans, especially at the expense of out-of-work military veterans.
The company’s announcement immediately sparked a #BoycottStarbucks movement on Twitter and brought condemnation from coast to coast.
The Starbucks brand name also took a major hit after the controversy erupted over the hiring announcement.
Not long afterward, Starbucks CEO Howard Schultz announced he was stepping down as head of the coffee giant.