Starbucks Shares Slide After Coffee Chain Says Sales Fell Again, Suspends Outlook – CoffeeTalk

Starbucks has reported a decline in sales, marking the first time the company has experienced a slump since the Covid-19 pandemic. CEO Brian Niccol announced that the company needs to fundamentally change its strategy to return to growth. The company’s new CEO aims to reverse slowing demand for Starbucks’ drinks, starting with its largest market: the U.S.

Niccol plans to share more details on the steps Starbucks is taking to turn around the business on the company’s earnings call, scheduled for Oct. 30. The company’s new CEO aims to reverse slowing demand for Starbucks’ drinks, starting with its largest market: the U.S.

The company is “fundamentally changing” its marketing by refocusing on all of its customers, not just members of its loyalty program. He also plans to simplify its “overly complex menu,” fix its pricing, and ensure all of its drinks are handed directly to customers. These goals have been top complaints from customers and baristas in recent years.

For the third consecutive quarter, Starbucks’ same-store sales fell, with a 7% decline in the third quarter being the company’s steepest drop since the Covid-19 pandemic. The company blamed its soft sales on weaker demand in North America, with same-store sales decreasing 6% in its home market and 10% in traffic. In China, same-store sales plummeted 14%, attributed to competition in the country.

The company suspended its fiscal 2025 outlook due to the recent CEO transition and the “current state of the business.” Despite the dismal quarter, the company increased its dividend from 57 cents to 61 cents per share. Chief Financial Officer Rachel Ruggeri stated that the company is developing a plan to turn around the business, but creating a strategy will take time.

Niccol joined Starbucks after six years as CEO of Chipotle, where he led the company through a turnaround after foodborne illness crises, invested in its digital business, and turned it into a top industry performer even during the pandemic.

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