Starbucks must face a shareholder lawsuit claiming the company defrauded investors by hiding declining sales in its two largest markets, the United States and China. A U.S. District Judge in Seattle ruled that shareholders can proceed with claims that Starbucks intentionally misled them during a January 2024 analyst call by promoting the success of its "reinvention plan" while concealing underlying weakness. The suit also points to a regulatory filing from the same period where the company stated there were "no material changes" to business risks. The legal action follows an April 30, 2024, announcement where Starbucks lowered its annual sales forecast after revealing a surprise 4.4% drop in same-store sales, which included a 3% decline in the U.S. and an 11% fall in China. The subsequent 16% drop in Starbucks' share price on May 1, 2024, erased approximately $16 billion in market value. A company spokesperson stated that Starbucks intends to continue defending itself against the allegations.