Jim Cramer Stands by Starbucks Amidst Earnings Slump

Published 5 hours agoSBUX

Jim Cramer Stands by Starbucks Amidst Earnings Slump

Jim Cramer, host of CNBC's 'Mad Money,' maintains a bullish outlook on Starbucks despite the recent setbacks in the company's turnaround efforts. Emphasizing the role of CEO Brian Niccol, previously noted for his success at Chipotle Mexican Grill, Cramer sees Niccol as critical to revitalizing Starbucks. He insists that while the turnaround requires patience, Niccol's leadership is key to helping Starbucks regain its status as the 'third place' for consumers.

Starbucks recently reported a 50% drop in net income to $384.2 million, although its revenue saw a modest rise of 2% to $8.8 billion. According to the Financial Times, the company's shares fell by up to 11%, reaching $75.50, which reflects investor concerns about the costs associated with Niccol's 'Back to Starbucks' strategy. This plan focuses on improving the in-store experience with investments in labor and a simplified menu, steering away from an overreliance on technology.

Despite these challenges, Cramer encourages investors to consider the long-term potential of the company's strategy, advising to 'buy more Starbucks into weakness.' He underscores this confidence in Niccol's vision for Starbucks' future growth, even as the company's current financials present immediate hurdles.

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