Rosen Law Firm, a global investor rights law firm, has issued a reminder to purchasers of securities in Starbucks Corporation (NASDAQ: SBUX) who acquired Starbucks shares between November 2, 2023, and April 30, 2024, to take note of the October 28, 2024, deadline for lead plaintiff applications.
Investors who purchased Starbucks securities during the specified period may be eligible for compensation without any out-of-pocket expenses, thanks to a contingency fee arrangement, the firm reported.
The lawsuit alleges that during the class period, Starbucks executives provided misleading information about the company's fiscal year 2023 revenue and guidance for fiscal year 2024. Despite expressing confidence in the company’s reinvention and diversification strategies, the lawsuit claims that Starbucks concealed critical adverse information related to its plans for global expansion, same-store sales performance, and innovation in foreign markets. When the true details became public, investors reportedly experienced significant financial losses.
On April 30, 2024 second-quarter earnings had dropped 2%. On a call with investors, CEO Laxman Narasimhan acknowledged disappointing financial results, with net revenue down 2% to $8.6 billion. On the call, Narasimhan said, “let me be clear from the beginning. Our performance this quarter was disappointing and did not meet our expectations.”
On July 30, 2024, Starbucks reported quarterly revenue below analysts' expectations in Q3, with net sales dropping 1% to $9.11 billion, compared to the expected $9.24 billion. Despite this, the company's shares rose more than 5% in extended trading as the results were better than feared. The coffee giant's net income was $1.05 billion, or 93 cents per share, down from $1.14 billion, or 99 cents per share, a year earlier. U.S. traffic fell by 6%. Starbucks is exploring strategic partnerships in China to accelerate growth and opened 526 net new stores during the fiscal quarter.
The coffee company faces multiple legal issues amidst the appointment of their new CEO, Brian Niccols, who officially joined the company on September 9.
Bodum USA has also filed a lawsuit against Starbucks, according to a report in BloombergLaw. Bodum USA Inc. and its subsidiary Pi-Design AG are suing Starbucks for allegedly selling a French press coffeemaker that infringes on Bodum's patented design and violates an exclusive seller agreement. The lawsuit, filed in the US District Court for the Northern District of Illinois, claims Starbucks' product mimics Bodum's patented "Plunger-Filter Beverage-Making Machine with a Closable Pouring Opening" and breaches a 2008 settlement agreement where Bodum was designated as Starbucks' exclusive supplier.