Jim Cramer says don't sell Starbucks stock on the new CEO's painful moves to right the ship

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Jim Cramer says don't sell Starbucks stock on the new CEO's painful moves to right the ship
EarningsBrian NiccolChina
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New Starbucks CEO Brian Niccol has cleared the decks for his turnaround plan.

New Starbucks CEO Brian Niccol 's decision to preannounce disappointing earnings is no reason to sell the stock, Jim Cramer said Wednesday. "I find it surprising that anyone thinks surprising," Jim said. "If you sell the stock today, you're only selling it because you're reacting to the press reports and the analysts, who are backward looking, not forward looking.

mountain Starbucks' 12-month stock performance versus the S & P 500. Starbucks saw a 6% drop in U.S. comparable-store sales in its fourth quarter, with a 10% decline in transactions partially offset by a 4% increase in the average price of orders. That year-over-year drop in comparable sales and transactions was even steeper than what was registered in Starbucks' weak second and third-quarter results — a pair of reports that put Narasimhan firmly on the hot seat.

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