Starbucks has released preliminary results for its fiscal fourth quarter, revealing a continued decline in sales. The coffee giant’s same-store sales fell for the third consecutive quarter, with a 10% drop in traffic to North American stores. This decline has led the company to suspend its fiscal 2025 outlook.
CEO Brian Niccol emphasized the need for a strategic overhaul with the “Back to Starbucks” plan, aiming to refocus marketing efforts on all customers and simplify the menu. Niccol plans to elaborate on these strategies during the upcoming earnings call on October 30.
Despite the challenging quarter, Starbucks increased its quarterly dividend from 57 cents to 61 cents per share. The company’s preliminary net sales fell 3% to $9.1 billion, with adjusted earnings per share at 80 cents, missing analysts’ expectations.
In the U.S., Starbucks is losing occasional customers who are cutting back on spending. In China, competition from local rivals like Luckin Coffee has impacted sales significantly, with a 14% drop in same-store sales.
Niccol, who joined Starbucks from Chipotle, is focusing on improving the barista experience, morning service, cafes, and branding. The company is also undergoing executive changes, including the recent appointment of Tressie Lieberman as global chief brand officer.
Starbucks has a market cap of over $109 billion, with shares up 1% this year. As the company navigates these challenges, investors and stakeholders are keenly watching the upcoming strategies to regain growth momentum.
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