Starbucks Battles Slumping U.S. Sales and Declining Profits

As of September 5, 2025, Starbucks Corporation, the global coffee powerhouse, is grappling with a challenging situation in its core U.S. market. The company, which commands a substantial market capitalization of $99.2 billion, has seen its stock price decline by 25.7% from its 52-week high reached in early March 2025. This underperformance is in stark contrast to the broader Nasdaq Composite index, which has gained 10.8% over the same period.

The bearish trend extends beyond the short term, with Starbucks' stock down 4.4% year-to-date and 6.4% over the past 52 weeks, compared to the Nasdaq's gains of 11.3% and 25.5%, respectively. This downward trajectory is further confirmed by the stock trading below its 200-day and 50-day moving averages since April and mid-August, respectively.

The primary driver behind Starbucks' struggles appears to be the underwhelming performance in its U.S. operations. In the fiscal third quarter ending June 29, 2025, the company reported a 2% year-over-year decline in global comparable store sales, with the U.S. market also seeing a 2% decline in comparable sales and a 4% drop in comparable transactions. While consolidated revenue increased by around 4% year-over-year to $9.5 billion, non-GAAP earnings per share plummeted by approximately 46% to $0.50.

Starbucks' management has been pushing a costly "Back to Starbucks" revival strategy, with heavy investments in labor, store redesign, and brand experience. However, these efforts have yet to translate into meaningful results, weighing on the company's margins and earnings. As a result, investor confidence in Starbucks' turnaround remains subdued, and the company's shares continue to struggle.