Starbucks Stock Plunges After Declining Same-Store Sales Weaken 2024 Outlook
6 minutes ago
Starbucks (SBUX) posted quarterly earnings and revenue that came up short of Wall Street expectations amid an unexpected decline in both U.S. and international same store sales, news that sent the coffee chain’s shares sharply lower Wednesday.
The Seattle-based company late Tuesday reported fiscal second-quarter adjusted earnings of 68 cents per share, whereas analysts had called for 79 cents a share. Net sales in the period fell 2% to $8.56 billion from a year earlier and came in below the $9.13 billion Street estimate.
The company’s same-store sales fell 4% in the quarter, driven by a 6% decline in cafe traffic. Analysts had expected same-store sales growth of 1%. Regionally, same-store sales decreased 3% in the U.S. and 6% internationally. In China—Starbucks’ second largest market—the metric contracted 11% on the back of the average ticket shrinking 8%.
Looking ahead, the company trimmed its 2024 revenue growth guidance to the low single digits, down from its earlier forecast of 7% to 10%. It sees global and U.S. same-store sales growth ranging from low single digits to flat, below its prior projection of 4% to 6%.
Starbucks shares were down 17% at $73.72 around midday Wednesday, bringing the stock’s 12-month losses to nearly 36%.
Mag 7 Stock Gains Account for Majority of Short Interest Growth
38 minutes ago
Short interest on Mag 7 stocks is at historic highs, but short sellers are feeling the pain, according to data from S3 Partners.
Cumulatively, $127 billion worth of Mag 7 shares are sold short, representing about 12% of the U.S. stock market’s short interest. Total Mag 7 short interest has increased by 17%, or $18 billion, this year. But just $7 billion of that increase is from additional shorts; the remaining $11 billion is derived from shares sold short increasing in value.
That’s saddled short sellers with big mark-to-market losses. Nvidia (NVDA) short positions have suffered losses of nearly $10 billion this year. Meta (META) and Amazon (AMZN) short positions are down $2.3 billion and $2.1 billion, respectively.
Tesla (TSLA), down more than 27% year-to-date, and Apple (AAPL), down 11%, have been the only profitable Mag 7 short positions so far this year.
And yet short sellers are sticking to their guns. Apple and Amazon are the only stocks in the group on which traders have pared their shorts.
Super Micro Computer Stock Slumps After Revenue Miss
1 hr 22 min ago
Super Micro Computer (SMCI) shares slumped Wednesday morning after the server and data storage provider missed analysts’ expectations for revenue in the third quarter of its fiscal year.
The artificial intelligence (AI) hardware maker reported revenue of $3.85 billion, more than doubling from $1.28 billion in the year-ago quarter but missing analysts’ expectations of $3.93 billion. Diluted earnings per share came in at $6.56, up from $1.53 in the year-ago quarter and above estimates compiled by Visible Alpha.
Super Micro Computer raised its full-year revenue guidance to $14.7 billion to $15.1 billion, up from $14.3 billion to $14.7 billion previously, saying it expects to gain market share as it ramps up new solutions.
Super Micro Computer shares were down 16% at $720.75 Wednesday morning. Still, the stock has risen about 150% so far this year.
CVS Stock Plummets on Earnings Miss, Lowered Guidance
2 hr 21 min ago
CVS Health (CVS) shares tumbled 18% in early trading Wednesday after the retail pharmacy giant posted first-quarter results that missed analysts’ estimates and lowered its guidance for the full year.
CVS reported first-quarter revenue of $88.44 billion, up 3.7% from a year earlier, but below the $89.33 billion analysts expected, according to estimates compiled by Visible Alpha. Net income and diluted earnings per share (EPS) declined from the year-ago period and also missed estimates, with CVS reporting $1.12 billion in profit or 88 cents per share, down from $2.14 billion or $1.65 per share a year ago.
Profits were hit as CVS struggled with a rise in Medicare utilization, as well as the impact of a decline in the company’s Medicare Advantage star rating. CVS saw health care costs increase to $27.8 billion in the first quarter, compared to $20.45 billion in the first quarter of 2023.
The company lowered its projected full-year EPS to at least $5.64, down from at least $7.06 previously.
With Wednesday’s losses, CVS shares have shed about 30% of their value so far this year.
Stocks Making the Biggest Moves Premarket
3 hr 5 min ago
Gains:
- Pinterest (PINS): Shares of the social media company jumped 14% after it reported a smaller-than-expected loss in the first quarter on higher advertising revenue and user growth.
- Cameco (CCJ): Shares of the uranium miner rose more than 5% after the Senate passed a bill to ban the import of enriched uranium from Russia, one of America’s largest foreign suppliers.
- Amazon (AMZN): Shares of the e-commerce giant climbed about 2% after it topped first-quarter earnings estimates on robust data center and advertising growth.
Losses:
- Starbucks (SBUX): The coffeehouse chain’s shares tumbled more than 13% after missing first-quarter earnings estimates amid a slowdown in sales.
- CVS Health (CVS): Shares of the pharmacy chain and Aetna owner slid 12% after reporting rising Medicare utilization and soaring health care costs weighed on first-quarter profit.
- Advanced Micro Devices (AMD): Shares of the chipmaker fell more than 5% after raising its full-year data center revenue guidance, but less than Wall Street had expected.
Stock Futures Slip Ahead of Fed Rate Decision
3 hr 49 min ago
Futures contracts connected to the Dow Jones Industrial Average were down 0.2% in premarket trading on Wednesday.
S&P 500 futures were off about 0.3%.
Nasdaq 100 futures were 0.5% lower about an hour before markets opened.
Read More: Stocks Waver Ahead of Fed Rate Decision; CVS, Starbucks Tumble