In recent weeks, Starbucks (NASDAQ: SBUX) has found itself at the center of growing boycotts and protests. The controversy emerged after Starbucks filed a lawsuit against the Workers United union due to a now-deleted social media post expressing support for Palestine in the aftermath of Israel’s recent Gaza bombings.
Videos of protests from countries like Turkey, Qatar, Malta, and even students at a Los Angeles university have circulated on social media. According to one Starbucks employee, “a solid third” of the usual amount of customers that come to the store she works in does not show up anymore.
While the backlash is a concern for the coffeehouse chain, its stock price is yet to be affected by the ongoing protests. In fact, the stock surged almost 13% over the past week to $103.68.
Why is Starbucks stock up?
The potential repercussions of the ongoing backlash against Starbucks on its share price have been offset by the company’s latest earnings report, which beat Wall Street’s estimates on top and bottom lines.
In particular, the company posted earnings per share (EPS) of $1.06 for the fiscal Q4 2023, topping the consensus estimates of 97 cents per share. Revenue came in at $9.37 billion, also above the estimated $9.29 billion.
Net income for the three-month period that ended on October 1 stood at $1.22 billion, up from $878.3 million in the same quarter last year.
The strong earnings and revenue numbers come as demand for Starbucks’s drinks remained robust despite higher prices. The company’s same-store sales grew 8% year-over-year, driven by higher average checks and a 3% jump in customer traffic.
More join Starbucks, anti-Israel protests
Although its stock market performance remains intact for the time being, the number of protests against the coffee giant is on the rise.
It appears that the group was heading for a broader protest against Israel’s recent bombings, demanding a ceasefire in Palestine after the death toll exceeded 10,000 people. A day later, on November 5, tens of thousands of people gathered in Washington D.C., also calling for a ceasefire as the US capital continues to resist calls to stop the bombings.
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