You may want to prepare to drink your $6 Starbucks iced coffee black, or heaven forbid, with regular milk from a cow's udders.
Starbucks confirmed Thursday it's seeing shortages in some products — such as popular oat milk from supplier Oatly —as consumers flood the coffee chain's stores as they exit pandemic-related quarantine.
"I can confirm that we are experiencing temporary supply shortages of some of our products. Specific items will vary by market and store, and some stores will experience outages of various items at the same time,"a Starbucks spokesperson told Yahoo Finance via email. "We apologize for the inconvenience and are working quickly and closely with our supply chain vendors to restock items as soon as possible. Oat milk is an example of the handful of outages customers may experience when visiting their local Starbucks. A good reminder/tip, is the Starbucks app is a resource for item availability."
A source familiar with Oatly's thinking tells Yahoo Finance that demand for its product remains strong. The company has opened a new manufacturing plant in Ogden, Utah, and is making more oat milk than ever before, the source says.
The Wall Street Journal first reported Thursday that Starbucks is seeing product shortages, which include cups and coffee syrups.
Despite what looks to be impressive demand at Starbucks this summer, the coffee giant's stock has oddly remained stuck in the mud. Starbucks shares are up 4.6% year-to-date to $111, lagging the S&P 500's 12.3% gain as analysts fret about the retailer's margin outlook and the pace of its recovery post-pandemic.
"Consumption habits now largely broken in the U.S. may take time to rebuild," warned J.P. Morgan analyst John Ivankoe in a research note to clients. "While we are pleased with Starbucks’s recovery thus far, its 15% urban exposure as part of 40% of non-drive-through U.S. company store exposure makes it difficult to say at this point that Starbucks is a net beneficiary in the near term of what has been a highly distributed COVID-19 era."
Ivankoe rates Starbucks shares at Neutral with a $104 price target.
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