Starbucks CEO Pledges To Fundamentally Change Strategy As Sales Fall For Third Straight Quarter – CoffeeTalk

Starbucks reported quarterly earnings and revenue that missed analysts’ expectations, with sales in the U.S. and China disappointing. The company suspended its fiscal 2025 outlook and announced a multipart plan to improve the U.S. business immediately, including hand-delivering a customer’s drink in under four minutes. Starbucks plans to bring back condiment bars, eliminate extra charges for milk alternatives, and cut back menus. They also aim to bring “order to mobile order and pay” and improve restaurant staffing.

CFO Brian Niccol is optimistic about the company’s strengths and enduring brand, stating that they have a clear plan to move quickly. The strategy is currently focused on North America, with Niccol needing to spend time in China to better understand the company’s operations and market before deciding how to revive sales there.

In fiscal year 2025, Starbucks plans to cut back on new cafes and renovations to accommodate a redesign across its locations and free up capital for the broader turnaround. Shares of the company were flat in extended trading on Wednesday.

Starbucks reported a net income of $909.3 million, down from $1.22 billion a year earlier. Net sales dropped 3% to $9.07 billion, with global same-store sales falling 7% due to weak demand in the U.S. and China. Starbucks’ U.S. restaurants reported 6% decline in same-store sales, while in China, same-store sales plummeted 14% due to decreased traffic and average tickets. The company faces greater competition from local rivals, such as Luckin Coffee, which can undercut its prices.

Read More @ CNBC