Starbucks' refugee hiring program to counter Trump is hurting brand and sales, Credit Suisse says

Howard Schultz
David Ryder | Reuters

The backlash from some consumers about Starbucks' decision to eventually hire 10,000 refugees worldwide could negatively impact sales in the near term, according to analysts at Credit Suisse, who reiterated a hold rating on the coffee seller.

"Our work shows a sudden drop in brand sentiment following announcement of the refugee hiring initiative on Jan. 29th, to flattish from a run-rate of ~+80 (on an index of -100 to +100). Net sentiment has since recovered, but has seen significant volatility in recent weeks," equity analyst Jason West wrote in a research note.

Starbucks issued the statement in response to President Donald Trump's executive order barring immigrants from certain nations from entering the United States.

"We have a long history of hiring young people looking for opportunities and a pathway to a new life around the world. This is why we are doubling down on this commitment by working with our equity market employees as well as joint venture and licensed market partners in a concerted effort to welcome and seek opportunities for those fleeing war, violence, persecution and discrimination," Howard Schultz, Starbucks' chairman and CEO, wrote back in January.

Trump supporters threatened to boycott the coffee maker. Since the announcement was made, shares of Starbucks are flat.