Starbucks experienced a sharp drop in stock value following disappointing earnings reports, with a 12% decrease after the announcement. In the U.S., same-store sales decreased by 3% and foot traffic by 7%, while overall revenue fell by 1.8% to $8.56 billion. The decline was exacerbated by an 11% drop in sales in China, Starbucks' second-largest market. The company has also adjusted its sales forecast downwards for the year. CEO Laxman Narasimhan attributed the poor performance to inflation, cautious consumer behavior, and other challenges like adverse weather. Competition in international markets and boycotts in the Middle East have further impacted sales. Despite these setbacks, Starbucks is planning a recovery strategy named the "Triple Shot Reinvention with Two Pumps," focusing on improving service times and enhancing digital ordering.
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