Starbucks -4% amid sector pressure, SEC inquiry report

|About: Starbucks Corporation (SBUX)|By:, SA News Editor

Starbucks (NASDAQ:SBUX) is lower after The Wall Street Journal reports on details about the company's communications with the SEC on how it recognizes revenue.

Some of the issues that were reportedly looked at were Starbucks accounts for gift card revenue, the booking of pre-opening costs and an upfront payment of $7B from Nestle last year.

Starbucks is expected to make extra disclosures in its upcoming annual report, according to the WSJ report.

Updated: Starbucks says it reclassified stored value card breakage and changed accounting methodology as part of its adoption of the new revenue recognition guidance. As a result of correspondence with the SEC, the company has also expanded qualitative and quantitative disclosures. SBUX also notes that no corrections to disclosures are required and no changes will be made to financial statements or methods of accounting for the new revenue recognition guidance.

Shares of Starbucks are off 3.56% on the day and are down more than 6% for the week. The restaurant sector as a whole is lower on the day.

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