Starbucks’ second-quarter sales fell short of expectations, with total same-store sales declining 1% compared to a 0.26% drop forecast by analysts. The coffee giant attributed the decline to inflation and economic uncertainty in the US, but said its “Back to Starbucks” plan is showing signs of progress.
CEO Brian Niccol stated that while the company’s financial results don’t yet reflect its progress, it has real momentum with its strategy to revive demand for the struggling brand in the US. The plan involves reinstating a coffee-house atmosphere at stores and reducing production and service times.
Niccol also cited improvements in speed-of-service, thanks to the right staffing and deployment, as well as positive feedback from customers on refreshed marketing efforts. However, the company faces an increasingly cautious consumer due to US President Donald Trump’s trade policy.
In contrast, Starbucks’ international segment showed improvement, with sales in China coming in flat after four straight quarters of decline. The company reported a 2% increase in comparable sales internationally and saw a 3% rise in average ticket prices per visit.
Despite the mixed results, Starbucks shares were nearly flat in extended trading, down about 7% for the year so far. The company is cutting back on promotions and focusing more on broader marketing efforts to reach consumers.
Source: https://finance.yahoo.com/news/starbucks-posts-bigger-expected-drop-200644543.html