Starbucks defeats shareholder lawsuit over US, China sales declines

July 16 (Reuters) - A ‌federal judge ​dismissed ​a lawsuit accusing Starbucks of defrauding shareholders by intentionally concealing declining sales in ‌the United States and China, its largest markets.

• ⁠U.S. District Judge John Chun in Seattle said Starbucks' "innocent ‌explanation" that former Chief ‌Executive Laxman Narasimhan genuinely believed during a January 2024 analyst call that he was assessing sales ​trends in the just-completed quarter was "at least as compelling" as shareholders' claim that he was ⁠assessing current sales trends.

• Chun ruled on Wednesday, after having allowed ​the case to proceed last November.

• Lawyers for the shareholders, who are led by ​three pension plans in New ‌York, did not immediately respond to requests for comment on Thursday.

• The ⁠lawsuit followed a 16% decline in Starbucks' share price on May 1, 2024, one day after Starbucks lowered ⁠its annual sales forecast and said same-store sales fell 4.4% ​in its latest quarter. Those sales reflected declines of 3% in the United States and 11% in China.

• Brian ‌Niccol, who succeeded Narasimhan as chief executive, has pursued a "Back to Starbucks" ‌turnaround plan focused on simplified menus, shorter wait ⁠times, upgraded stores, improved ‌in-store technology, and ​closures of poorly performing stores.

(Reporting by Jonathan Stempel in New York; Editing by Chizu ‌Nomiyama)

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