The “Starbucks Indicator” Never Fails

A silver lining (not actually about silver) [DWR Logo]( August 1, 2024 Hi Reader Starbucks is one of the best real-time barometers of the economy. The entire business is brilliant. It lets customers decide how much they want to pay. You want a $3.00 coffee? No problem. Or you want a $9.00 extravagant coffee? They got that too. The customer decides how much they want to spend. As a result of this, Starbucks earnings reports are a far better window into consumer spending than any survey or economist’s formulation. This week we got a look through that window. Frankly, it was pretty cloudy, but there was a big silver lining. Long story short, the consumer is still holding back. Starbucks global comparable store sales declined 3%. Total orders were down 5%. Less people were buying. But average spending per customer rose 2%. That’s not a big increase (especially against inflation), but it’s been worse. So, overall, because this is Starbucks, it’s really not good. Because a decline in Starbucks revenue is extremely rare. Starbucks annual revenue growth is highly consistent: [chart] Only two years out of the last 20 have Starbucks sales dropped. The financial crisis was one time. And when many stores were ordered to be closed was another.. Other than those two brief interludes, Starbucks grows. That’s why this earnings report is ugly and a sign that the consumer is tending to be more conservative. But there was that silver lining in this. That was in Starbucks stock. The shares jumped about 4% after the report. That’s the exact opposite than the last quarter – which was equally as disappointing – shares fell 16% immediately after it. So there’s bad (economic downtick) and good (stocks may have “priced in” a lot of bad news). [Click here to see why this is another marker on the “Roadmap to Recession.”]( [Read More Button]( Dynamic Wealth Research 2010 West Avenue K #623 Lancaster, California 93536 We are sending this message to {EMAIL}. [UNSUBSCRIBE]( | [PRIVACY POLICY](