When Starbucks (NASDAQ:SBUX) announced Howard Schultz would return to the company as interim CEO, investors cheered. His first tenure as chief executive turned the company into a global brand and his second, years later, revived both the business and its stock price.
But the applause has since quieted as Wall Street forecasts that the coffee giant will keep spending money in its effort to stem a unionization tide.
The stock has slid 12% since Schultz took the reins on April 4, dragging the company’s market value down to $92.2 billion. The S&P 500 fell just 2% in the same time period.
Wedbush Securities and Citi Research both downgraded shares to neutral ratings in April, citing the labour situation and other concerns.
In late August, company-owned Starbucks cafes in Buffalo, New York, petitioned the National Labor Relations Board for a union election. Since then, more than 200 of the coffee chain’s locations have filed the paperwork to unionize. To date, 24 stores have voted to unionize under Workers United, with only two locations so far voting against.
In October, when Kevin Johnson was CEO, the company announced two wage hikes for all of its baristas that would take effect this year and bring its average wage up to $17 per hour. In late March, Starbucks Workers United warned Schultz could leverage those improved benefits in an attempt to curb the union’s campaign.
SBUX shares were positive 46 cents Thursday to open at $80.63.
