Starbucks Corp (NASDAQ: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.
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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 (NASDAQ: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 (NYSE:XLY) and Vanguard Total Stock Market Index Fund ETF (NYSE:VTI).
SBUX shares are trading up by 0.46% at $75.54 at last check Tuesday.
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