This Is Why the Market Ignored Starbucks Corporation's Billion-Dollar China Decision

When Starbucks Corporation (NASDAQ: SBUX) reported third-quarter earnings on July 27, much of the focus was bound to be on same-store sales growth, particularly in the coffee giant's core U.S. market. And while the 5% U.S. comps growth was a solid improvement after three straight quarters of disappointing comps, and China continues to absolutely crush it with 7% comps growth, management said it had concerns about the more-recent trend in the U.S., and reduced its full-year guidance and announced fourth-quarter expectations that led to a 9% beat-down for the stock.

The company also announced it was going to close all 380 Teavana retail stores, as mall traffic declines and the general brick and mortar retail trend more than offset marketing and merchandising efforts to revive sales at Teavana. Add it all up, and fears about Starbucks' ability to maintain the rate of growth it has delivered over the past several years are weighing on the stock, even as management continues to take steps to strengthen the business and adapt to a changing retail world.

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Source: Fool.com