Starbucks Strives for Comeback with Mixed Q1 Results
Headline: Starbucks Reports Q1 2025 Results, Beating Expectations but Facing Declines
Overview:
Starbucks (SBUX) released its first-quarter fiscal year 2025 financial results under the leadership of CEO Brian Niccol, showing declines but surpassing Wall Street estimates.
Key Metrics:
* Revenue: $9.4 billion, flat year-over-year
* EPS: $0.69, a 23% decrease
* Global Same-Store Sales: -4% decline
* Foot Traffic: -6% decline
* Average Ticket Size: 3% growth
Turnaround Plan:
Niccol's turnaround strategy focuses on:
* Emphasizing core coffee products
* Improving pricing
* Enhancing service speed
Financial Impact:
Starbucks attributed the earnings decline to investments in this plan. Operating margin contracted by 390 basis points.
Market Outlook:
* Same-store sales decline expected to continue
* Wall Street analysts predict improvement by fiscal year 2026
China Operations:
China remains a key focus, with a stagnant domestic economy and strong competition. CEO Niccol visited the market and expressed optimism.
Operational Changes:
* Code of Conduct implemented, restricting seating and bathroom use to paying customers
* Corporate layoffs planned for efficiency
* Management shakeups and team reorganizations
Analyst Perspective:
BTIG analyst Peter Saleh anticipates momentum building in same-store sales growth, margins, and earnings in the upcoming quarters.