Starbucks Aims for a Comeback Despite Declines
Financial Results
Starbucks (SBUX) reported mixed results for its first fiscal quarter of 2025:
* Revenue: $9.4 billion, flat year-over-year, meeting estimates
* Earnings per share: $0.69, exceeding expectations by $0.03
* Global same-store sales: -4%
* Global foot traffic: -6%
* Average ticket size: +3%
CEO Brian Niccol's Turnaround Plan
Under the leadership of new CEO Brian Niccol, Starbucks is implementing a strategy to improve performance:
* Focus on core coffee products
* Optimize pricing
* Enhance service speed
* Reduce menu offerings by 30%
* Increase marketing spend
* Launch a staffing pilot program in 700 stores
Market Expectations
Wall Street analysts remained pessimistic about Starbucks' same-store sales, forecasting further declines:
* Same-store sales: -5.30%
* Foot traffic: -7.28%
* Ticket growth: 1.87%
Outlook
Despite the challenges, Starbucks remains optimistic about its recovery:
* Operating margin expected to improve
* Same-store sales growth anticipated in fiscal 2026
* Coffee bean cost impact minimal due to limited green coffee costs
Investment Highlights
* Starbucks stock has risen 32% in the past six months post-Niccol's appointment.
* The company plans to open additional stores in North America and internationally.
* Starbucks China remains a focus area, with plans to address market dynamics and competition.
Management and Operational Changes
* Starbucks implemented a Coffeehouse Code of Conduct.
* Corporate layoffs announced to enhance efficiency.
* Management shakeups in the works as executives depart and teams are restructured.