Prime Highlights
- Starbucks’ same-store sales grew for the first time in nearly two years, showing progress in its turnaround plan.
- CEO Brian Niccol said the company’s “Back to Starbucks” strategy is helping win back customers and build momentum.
Key Facts
- Global same-store sales rose 1%, while U.S. sales turned positive in September and continued to improve in October.
- Starbucks’ net sales increased 5% to $9.57 billion for the quarter, and its shares rose 2% after the results were announced.
Background
Starbucks’ same-store sales grew for the first time in almost two years, showing its recovery plan is working. Even though the company’s quarterly earnings were lower than expected, the coffee chain reported signs of stronger customer demand and better performance in major markets.
For the quarter ending September 28, Starbucks’ global same-store sales rose by 1%, surpassing Wall Street expectations of a decline. While U.S. same-store sales were flat overall, they turned positive in September and have continued that momentum into October, according to Chief Executive Officer Brian Niccol. “We’re a year into our ‘Back to Starbucks’ strategy, and it’s clear that our turnaround is taking hold,” Niccol said in a statement.
The company’s fiscal fourth-quarter net income fell to $133.1 million, or 12 cents per share, compared with $909.3 million, or 80 cents per share, a year earlier. Excluding restructuring and litigation costs, adjusted earnings came in at 52 cents per share. Starbucks also reported a 5% increase in net sales, reaching $9.57 billion for the quarter.
As part of a broader restructuring plan, the company closed 627 stores and reduced around 900 non-retail positions. Starbucks has hired more assistant store managers to make service quicker and smoother. Now, most stores serve customers in under four minutes, making the in-store experience better.
Outside the U.S., same-store sales climbed 3%, led by a 6% rise in customer traffic. In China, Starbucks’ second-largest market, same-store sales increased 2%, supported by lower drink prices and a 9% rise in traffic. The company is also considering selling a stake in its China business but plans to retain a meaningful share, reflecting confidence in the market’s long-term potential.
After the announcement, Starbucks’ shares went up 2% in after-hours trading as investors saw early signs of recovery and liked the company’s focus on better quality, faster service, and stronger customer connections.
