Starbucks has reported weaker-than-expected earnings for its fiscal second quarter, with same-store sales declines for five consecutive quarters. However, the coffee giant’s CEO, Brian Niccol, is optimistic about the company’s turnaround strategy.
Despite missing revenue estimates and earnings per share expectations, Niccol expressed confidence in the progress made so far. He attributed this to the “Back to Starbucks” plan, which aims to return the focus to coffee quality and customer experience.
The company reported $384.2 million in net income attributable to the company, or 34 cents per share, a significant decrease from last year’s $772.4 million, or 68 cents per share. Labor costs rose as the company staffed its U.S. cafes with more baristas.
Starbucks also spent more on promotions to drive traffic to its stores outside of its home market. The company incurred restructuring costs for simplifying its global corporate organization. Excluding these costs, the company earned 41 cents per share.
Same-store sales fell for the fifth consecutive quarter, driven by a decline in transactions and lower average ticket prices in key markets like the US and China. In contrast, Starbucks’ home market saw a steeper traffic decline.
CEO Niccol remains committed to his turnaround strategy, which includes revamping cafes with premium touches, improving staffing levels, and overhauling innovation processes. He aims to achieve faster service speeds, such as completing every order in four minutes or less.
Despite missing earnings expectations, the early signs of Starbucks’ turnaround efforts are encouraging. The company will continue to focus on improving customer experience and driving sales growth through these initiatives.
Source: https://www.cnbc.com/2025/04/29/starbucks-sbux-q2-2025-earnings.html