WASHINGTON: Starbucks Corp sales fell for the first time since 2020 as half-off deals and new lavender lattes weren’t enough to entice increasingly budget-conscious consumers.

The shares fell as much as 13% in postmarket trading. If that holds, it would be the company’s biggest stock drop since March 2020 in the early days of the pandemic.

“Starbucks reported what’s perhaps the worst set of results of any large company so far this quarter,” said Adam Crisafulli, an analyst with Vital Knowledge, in a note.

On a call with investors on Tuesday, the company cut its full-year revenue growth forecast to low single-digits and signaled adjusted earnings per share may be flat.

Starbucks has struggled to keep up with lofty expectations set by previous management.

Chief executive officer Laxman Narasimhan, who has been on the job a little more than a year, has already lowered guidance several times.

But the latest results underscore the challenge of selling US$6 lattes to consumers grappling with persistent inflation.

The company reported a 4% decline in same-store sales in the latest quarter, while analysts expected growth. In China, same-store sales fell 11%.

The pullback by consumers was widespread, with the overall number of transactions sinking 6% and retreating in each of the company’s geographic segments.

Consolidated net revenue fell, while earnings per share excluding some items also underperformed expectations.

Chief financial officer Rachel Ruggeri said the quarterly results were hurt by colder-than-usual weather in January that affected store visits across the industry, a more cautious consumer around the world and the conflict in the Middle East.

“We were not pleased with the performance this quarter,” Ruggeri said.

“We really sharpened our focus, and we have a very clear path going forward.”

 - Bloomberg