It has been a whirlwind week for Starbucks Corp. (NASDAQ:SBUX). The stock was up 2.39% in early afternoon trading on June 6.
On May 29, Starbucks closed 8,000 stores across the United States in order to hold a mandatory four-hour racial-bias training session. Starbucks had aimed to address issues that emerged in the aftermath of an incident that saw two black men arrested at a Philadelphia store. The reaction on social media has still been decidedly negative, even after the training. Over the past week the social media listening and analytics company Digimund reported that 45% of social mentions for Starbucks were negative.
On June 4 Howard Schultz announced that he would step down as Starbucks chairman, which sent the stock down on the next day. There are rumours that Schultz intends to enter the political arena and is gearing up for a primary run on the Democratic side. Several emails released by Wikileaks in 2016 revealed that Schultz was strongly considered as a running mate to Hillary.
The controversial weeks following the Philadelphia incident have cast a shadow over the company in spite of strong earnings. In the second quarter Starbucks reported adjusted earnings per share of $0.53, which were in line with estimates, and revenue of $6.03 billion. It also posted same-store sales growth of 2% in the United States, which also beat projections.
Starbucks stock is still down 3% in 2018 so far. The stock is worth a look as the company seeks to push forward and put the social and political controversy in the rear view mirror.
