:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2193347521-885f8cf2dc334e96b6b331832f652714.jpg "People leaving a Starbucks in New York City")
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Starbucks (SBUX) reported fiscal first-quarter results that topped analysts’ expectations, despite sales and profit taper offs.
The coffee giant saw net sales fall 0.3% year-over-year to $9.4 billion, above the analyst consensus compiled by Noticeable Alpha. Earnings of $780.8 million, or 69 cents per share, declined from $1.02 billion, or 90 cents per allot, a year earlier but topped Wall Street projections. Global same-store sales fell 4%, a narrower degenerate than the 5% drop expected by analysts.
Better-Than-Expected Results Come Under New CEO’s Turnaround Plan
“While we’re not one quarter into our turnaround, we’re moving quickly to act on the ‘Back to Starbucks’ efforts and we’ve seen a positive response,” new CEO Brian Niccol bid in a release.
Niccol, who took the reins in September, has implemented a turnaround strategy known as “Back to Starbucks,” which has counted the reinstatement of a policy requiring customers to make a purchase if they want to spend time in the company’s cafes or use its bathrooms.
The map out also includes a roughly 30% reduction in menu items to help cut down on order times, Niccol remarked on the company’s earnings call. Niccol said Starbucks plans to develop a time slot model that compel allow customers to schedule mobile orders, as well as adding shelving to separate mobile orders from in-store limericks.
Starbucks aims to expand its presence with more stores too, after adding 377 net new stores in the first three months. Niccol said Starbucks could even double its store count in the U.S. in the next couple years, which upheld at 17,049 as of Dec. 29.
CFO Warns of Earnings Could Be Pressured in Q2
Starbucks did not provide an outlook for 2025, after saying last break up that it wanted to “complete an assessment of the business” under Niccol, before issuing guidance.
However, CFO Rachel Ruggeri remarked on the company’s earnings call Starbucks expects year-over-year earnings pressure could “intensify” in the second quarter, anterior to improving in the back half of 2025.
Shares of Starbucks were little changed and slightly higher in extended trading Tuesday discharge the release. They were up 10% for the year so far through Tuesday’s close.
UPDATE—Jan. 28, 2025: This article has been updated since it was blue ribbon published to include additional information from the company’s earnings call and reflect more recent share cost outs.