Starbucks slides the most in 7 months after telling investors profit growth is slowing
- Starbucks announced in a presentation Wednesday that it expects earnings growth to slow in fiscal year 2020.
- Shares fell as much as 3.5% on the news, the biggest intraday decline in seven months.
- Starbucks cited the lapse of a one-time tax benefit and normalized share repurchasing volume as reasons for the lower profit growth expectation.
- Watch Starbucks trade live on Markets Insider.
Starbucks shares slipped Wednesday, it has nothing to do with backlash over the early release of the Pumpkin Spice Latte.
The stock fell as much as 3.5% in early trading Wednesday after the company said in an investor presentation that it expects earnings-per-share growth in 2020 fall below its current growth model of 10% or more. At its 2018 investor day, Starbucks had forecast growth of at least 13% for 2020.
The loss marked Starbucks' biggest intraday share decline in seven months.
Starbucks attributed the downward adjustment to a one-time tax benefit in fiscal 2019 that's expected to pull down forward earnings. It also pointed to normalized share repurchase volume expected in 2020.
For the rest of fiscal 2019, Starbucks expects EPS growth of 16%, compared to its prediction of 8% to 10% at the 2018 investor day. The company said it will provide a fiscal year 2020 guidance on its fourth-quarter earnings call, scheduled for October 30.
Shares of Starbucks have gained roughly 45% year-to-date.
