By Roshan Fernandez

Shares of Starbucks declined after investors became impatient with the coffee chain's turnaround, which analysts say will take longer than previously anticipated.

Shares fell 6.1% to $79.69 on Wednesday. The Seattle-based company's shares are down nearly 20% this month, on pace for the worst month since November 2008 when the stock fell 32%.

Starbucks, which reported second-quarter earnings on Tuesday after the bell, said its same-store sales declined 1% globally and 2% in the U.S. It is the fifth straight quarter that the coffee chain reported a decline in global same-store sales, though the decrease was slimmer.

Analysts at BMO financial group said in a report that they are maintaining confidence in Starbucks' turnaround potential but the company's near-term pressure on per- share earnings will be greater than previously expected.

Chief Executive Brian Niccol, who previously piloted Chipotle and Taco Bell, said on the Starbucks' quarterly call that earnings per share shouldn't be used as a measure of success at this point in the turnaround.

"I've led other turnarounds, and everything I've seen tells me we're on the right track," Niccol said. "Where we're seeing real change is in our coffee houses."

Analysts at Oppenheimer said they expect Starbucks' margins and earnings per share to become a major focus in fiscal year 2026. They anticipate same-store sales growth to remain negative through its third fiscal quarter before turning positive afterward.

"We believe investors are better understanding SBUX's turnaround requires patience, vs. a quick powerful inflection," Oppenheimer analysts said.

BTIG analysts said Starbucks is taking "two steps forward, one step back" as the chain invests in labor at the expense of its margins.

"While management was upbeat on the turnaround strategy, citing improvements in speed of service, labor turnover, and trends among non-rewards customers, we are disappointed by the reversal in domestic comps," BTIG analysts said.

Starbucks said that a new technology pilot at dozens of locations was helping expedite wait times for customers, The Wall Street Journal reported. It soon plans to expand the pilot to hundreds more stores.

Write to Roshan Fernandez at roshan.fernandez@wsj.com

(END) Dow Jones Newswires

April 30, 2025 14:05 ET (18:05 GMT)

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