06:32 AM EDT, 05/01/2024 (MT Newswires) -- Starbucks' ( SBUX ) shares sunk early Wednesday after slashing its full-year outlook as the coffee chain recorded weaker-than-expected fiscal second quarter results, as cautious consumer spending and a deteriorating economic environment weighed on customer traffic.

The company now anticipates per-share adjusted earnings to grow between a flat and low-single-digit range versus its prior projections for a 15% to 20% increase, Chief Financial Officer Rachel Ruggeri said during a late Tuesday conference call, according to a Capital IQ transcript. The stock slumped 12% in premarket activity.

Global revenue growth is pegged at low-single digits, compared with the previous guidance for a 7% to 10% gain. The retailer also forecasts global comparable store sales to be flat to down by low-single digits, compared with prior expectations for 4% to 6% growth.

Starbucks' ( SBUX ) business underperformed during the second quarter with revenue in the US, China and Middle East, Ruggeri said. "Revenues in the US, China, Middle East and other markets were impacted more deeply than anticipated by the continued multifaceted headwinds."

The company plans to tackle the headwinds through actions to "unlock capacity and track demand in the spirit of uplifting traffic," but some of these efforts will take time, the CFO said. The company remains "confident in our long-term growth opportunity and thus, committed to our strategy and the related investments," she said.

For the quarter ended March 31, the coffee giant's adjusted EPS declined 8% to $0.68, below the Street's view for $0.80. Revenue decreased 1.8% to $8.56 billion, trailing analysts' $9.16 billion estimate. Global comparable store sales slid 4% in the period versus a 1.1% gain modeled by the market, driven by a 6% drop in transactions, partially offset by a 2% increase in average ticket.

US same-store sales fell 3% due to fewer occasional customers, a "more cautious consumer environment" and extreme weather, Ruggeri said on the call. International comparable sales waned 6%, as it continued to see negative impacts to its business in the Middle East. China same-store sales tumbled 11%, as the "market continued to recover slower than expected with further impacts from the timing of holiday-related travel trends," Ruggeri said.

"In a highly challenged environment, this quarter's results do not reflect the power of our brand, our capabilities or the opportunities ahead," Chief Executive Laxman Narasimhan said in the earnings statement. "It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us."

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