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Starbucks (NASDAQ: SBUX) investors are having their worst day in more than four years. Shares of the coffee chain slumped as much as 17.4% Wednesday, marking the stock's worst decline since early 2020. As of 1:07 p.m. ET, shares were still down roughly 17.4%.

The catalyst that sent the coffee purveyor sharply lower was disappointing quarterly results, which caused the company to slash its full-year guidance.

Misreading the market

For the company's fiscal 2024 second quarter (ended March 31), Starbucks reported revenue that declined 2% year over year to $8.6 billion. The bad news continued to the bottom line, with adjusted earnings per share (EPS) of $0.68, a decline of 14%.

For context, analysts' consensus estimates were calling for revenue of $9.1 billion and EPS of $0.80, so Starbucks missed by a wide margin on both counts. Comparable store sales were dismal, declining 4% year over year, driven by a 6% decline in the number of transactions, partially offset by a 2% increase in average spending per customer.

Starbucks cited a number of challenges in the quarter, leaving investors thirsty for more. On the earnings conference call, CEO Laxman Narasimhan said Starbucks had difficulty meeting demand, with long wait times for morning commuters. This caused some Starbucks Rewards customers to cancel orders already in their digital carts. He noted the company is working hard to improve throughput.

The chief executive also pointed to a spending pullback by "cautious" lower-income consumers who are "occasional customers" of the chain, blaming a "deteriorating economic outlook."

Taking a step back

Due to the disappointing results, Starbucks slashed its full-year outlook. The company is now calling for fiscal 2024 revenue growth in the "low single digits," down from its previous range of year-over-year growth of 7% to 10%. That's a stunning revision, illustrating why some fair-weather investors headed for the exits.

While many analysts slashed their price targets, which helped fuel the sell-off, BTIG analyst Peter Saleh took a broader view, saying, "Starbucks [is] a global brand with good economics, no close competitor, and a very desirable customer base."

That's why the stock remains a buy.

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Danny Vena has positions in Starbucks. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.