What's Going On With Starbucks Shares On Tuesday? Coffee Retailer Is Under Scrutiny Ahead Of Earnings

Starbucks Corp SBUX shares were trading lower Tuesday but bounced back as the coffee giant grappled with technical difficulties within its mobile ordering system.

What Happened: The Starbucks app displayed a message instructing customers to place orders in person after some 1,400 users reported issues by 9 a.m. in New York, according to Downdetector.

Attempts at mobile ordering by users in Chicago, New York, Tampa, Boston, Atlanta, and Ottawa encountered a "system error" earlier in the day.

Baristas in New York and Chicago mentioned that they had not been informed of the cause by 11:30 a.m, reported Bloomberg.

Starbucks scheduled a buy-one-get-one-free promotion from noon to 6 p.m. on Tuesday, as detailed in a promotional email sent to rewards members.

Also Read: Starbucks and Mercedes-Benz Rev Up EV Charging Along I-5: A Green Drive from Canada to Mexico

Why It Matters: The incident marks the second time this month that Starbucks has experienced problems with its mobile app, following the significant Crowdstrike Holdings Inc CRWD IT outage that also disrupted mobile orders.

Starbucks is set to announce its fiscal third-quarter results on Tuesday. The company is under increased scrutiny to enhance its performance after an activist investor took a significant stake.

Starbucks stock has lost about 26% in the last 12 months.

To boost demand, the company has been rolling out discounts more frequently following a notable decline in orders earlier this year.

Price Action: Investors can gain exposure to the stock via Consumer Discretionary Select Sector SPDR Fund XLY and Vanguard Total Stock Market Index Fund ETF VTI.

SBUX shares are trading up by 0.46% at $75.54 at last check Tuesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.