Starbucks (SBUX) shares tumbled 5.05% in pre-market trading on Thursday, as fears of expanded tariffs weighed heavily on restaurant stocks. The coffee giant, known for its significant reliance on imported coffee beans, appears particularly vulnerable to the potential impact of these new trade measures.
The pre-market plunge comes amid a broader selloff in the restaurant sector, with several major players facing downward pressure. Starbucks' decline outpaced many of its peers, reflecting investors' concerns about the company's exposure to import-related costs. Other affected companies included Dutch Bros, which dropped around 5%, and Chipotle Mexican Grill, which declined 3.5%.
Analysts from Baird noted that while tariffs are expected to affect the entire restaurant industry, chains with more sophisticated supplier networks might be better positioned to navigate the challenges. However, they singled out Starbucks as potentially facing steeper hurdles due to its heavy reliance on imports. The National Restaurant Association warned that the new tariffs could lead to higher food and packaging costs, potentially forcing restaurants to increase prices. As the situation unfolds, investors will be closely watching how Starbucks and other restaurant chains adapt to this changing trade landscape.
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