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Geopolitical Turmoil Impacts Starbucks Sales in 2023

Starbucks (NASDAQ:SBUX) has often found itself embroiled in political or social causes. The ongoing Israeli-Hamas conflict has sparked protests outside Starbucks’ stores in North America and around the world, as well as boycotts.

The ongoing conflict between Israel and Hamas has reached new and devastating levels of violence since Hamas’ armed incursion of southeast Israel on October 7, 2023. That attack left more than 1,000 Israeli citizens and soldiers killed, and more than 200 were kidnapped to act as bargaining chips in the weeks that followed. Israel has vowed to destroy Hamas, launching a massive assault on Gaza.

On Tuesday, January 30, Starbucks released its first quarter (Q1) fiscal 2024 earnings. In the report, the company conceded that the ongoing conflicts in the Middle East have had a negative impact on its sales. Indeed, business in the region has taken an especially significant hit. In the near term, there does not appear to be a clear end in sight for the conflict. Israel has said that it will take the entirety of 2024 to eliminate the Hamas threat.

Beyond that, in Q1 2024, Starbucks delivered consolidated net revenue growth of 8% to a record $9.4 billion. Starbucks may have bemoaned the negative impacts of the conflict, but it still delivered comparable store sales growth to start the year. Comparable store sales grew 5% globally, 5% in North America, and 7% outside of North America. GAAP earnings per share (EPS) climbed 22% year-over-year to $0.90.