Starbucks (SBUX) Stock Down, Drink Prices 'Prematurely' Hiked

Starbucks (SBUX) said it prematurely implemented a price raise on drinks last week that was meant to come into effect on July 12.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Starbucks (SBUX) - Get Report  are falling 0.60% to $56.65 this afternoon after the company announced that it "prematurely" entered a price adjustment into its systems at U.S. locations.

The Seattle-based coffee company is planning "a small price increase on select beverages," to be rolled out on July 12, according to a statement on the company website.

This past week, however, customers were overcharged for those select drinks as the store's systems put the future price hikes into effect a week too soon.

"The maximum any customer could have been overcharged is 30 cents per beverage," Starbucks said.

Eater reports that Starbucks has increased prices in early July for the past two years.

Prices for Starbucks products vary depending on location and the specific order, with drinks in major metropolitan areas typically being the priciest.

(Starbucks is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings with a free trial.)

Separately, TheStreet Ratings rated this stock as a "buy" with a ratings score of B.

The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. TheStreet Ratings feels its strengths outweigh the fact that the company shows weak operating cash flow.

You can view the full analysis from the report here: SBUX

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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