Starbucks (SBUX) shares experienced a significant decline following the release of its fiscal second-quarter results, which failed to meet analysts’ expectations. The company reported a 1% drop in global same-store sales, surpassing Wall Street’s projected decline. CEO Brian Niccol, who took office last September and has been leading a major turnaround initiative, described the results as “disappointing” during a conference call.
In addition to internal strategic adjustments, Starbucks faces external challenges such as weakening consumer spending and possible increases in coffee bean prices due to uncertainties surrounding tariffs imposed by the Trump administration.
Starbucks’ stock fell nearly 7% to approximately $79 in afternoon trading, after hitting a low of $75.50 earlier in the session. Since the start of the year, the stock has dropped around 13%, losing a third of its value since reaching a 52-week high in early March.
Technically, after breaking below the 200-day moving average earlier this month, Starbucks shares consolidated within a symmetrical triangle, signaling market indecision ahead of the quarterly earnings report. The stock then broke below the pattern’s bottom trendline, setting the stage for a potential further decline. Notably, the 50-day moving average has converged toward the 200-day moving average throughout April, indicating a looming “death cross,” a bearish chart pattern suggesting lower prices ahead.
Two key support levels to watch include around $77, near the April low, and $72, aligning with last year’s May and July swing lows. Important overhead areas to monitor during potential recovery efforts include the $91 region, near the opening price of last August’s breakaway gap, and $99, where a series of peaks occurred between last August and early April.
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