It has been a while since I have had the pleasure of discussing Starbucks (NASDAQ: SBUX) and its business issues. That changes today, as Moody's Investors Service downgraded Starbucks' $550 million senior unsecured notes to 'Baa3' from Baa2.'
The move takes into account what the ratings house sees as challenges lying ahead for the coffee company. In addition, Moody's cut Starbucks' short-term commercial paper rating.
An analyst with Moody's stated that the "downgrade reflects Starbucks challenge of refocusing the business without significantly damaging its brand, as well as weaker than anticipated operating performance" over the intermediate term. The biggest problem facing Starbucks is seen as weakness in consumer spending and increased competitive pressures.
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