Why Starbucks Stock Dropped Today
Shares of Starbucks (NASDAQ: SBUX) fell on Monday, as investors wrestled with the ramifications of China's health and economic policies on the coffeehouse leader's growth prospects. By the close of trading, Starbucks' stock price was down 5.5% after falling as much as 7% earlier in the day.
COVID-related lockdowns in China have taken a heavy toll on Starbucks' sales and profits. The restaurant chain's comparable store sales plunged 44% in China in its fiscal third quarter ended July 3. That contributed to a 4-percentage-point decline in Starbucks' overall operating margin, to 15.9%, and a nearly 19% drop in earnings per share, to $0.79.
Chinese President Xi Jinping is a proponent of the country's "zero-COVID" policy. The controversial measures include locking down major cities and forcing millions of people to remain indoors, even as other governments work to reopen their economies.
Source Fool.com
