Starbucks, the renowned coffee chain, faced a significant setback as its shares plummeted by 12% following a disappointing quarterly earnings report. The company revealed weaker-than-expected earnings and revenue, attributing the decline to a surprising drop in same-store sales.

In addition to the disappointing financial results, Starbucks also revised its forecast for fiscal 2024, anticipating continued underperformance in its cafes for the foreseeable future. This outlook led to a sharp decline in the company’s stock value during extended trading.

CEO Laxman Narasimhan acknowledged the challenging business environment, stating that the quarterly results did not reflect the brand’s strength, capabilities, or future opportunities. The company reported a 4% decline in same-store sales, with a notable 6% decrease in cafe traffic.

Starbucks faced declining same-store sales and reduced foot traffic across all regions, with the U.S. market experiencing a 3% decline in same-store sales and a 7% drop in traffic. The international segment also reported a 6% decline in same-store sales, particularly in China, where sales plunged by 11%.

The company’s fiscal second-quarter earnings fell short of Wall Street expectations, with adjusted earnings per share at 68 cents compared to the anticipated 79 cents. Similarly, revenue of $8.56 billion missed the estimated $9.13 billion, reflecting a challenging quarter for the coffee giant.

Despite the disappointing results, Starbucks remains optimistic about addressing the current challenges and capitalizing on future opportunities. The company’s performance in the coming quarters will be closely monitored as it navigates the evolving consumer landscape and works towards regaining market confidence.