Starbucks beats low earnings expectations for its first quarter under new CEO

Starbucks (SBUX) strives to brew up a comeback.

The Seattle-based coffee giant released his financial year in the first quarter of 2025 on Tuesday after the end of the market, which showed falls everywhere, but beat Wall Street’s expectations.

This was the first full quarter under CEO Brian Niccol, who took the helm on September 9.

“While we are only a quarter into our turn, we move quickly to act on ‘Back to Starbucks’ efforts, and we have seen a positive answer,” Niccol said in the release.

Revenue was flat year over years of $ 9.4 billion against $ 9.32 billion estimates. Earnings per A share of $ 0.69 was a 23% decrease compared to the same quarter a year ago, but higher than they expected $ 0.66. The company referred to “increased investments” for Niccol’s rpm as part of the reason for the decline in earnings.

“We believe this is the fundamental change in the strategy needed to solve our underlying problems, restore confidence in our brand and return the company to sustainable, long -term growth,” Niccol said in release. His “back to Starbucks” plan requires a focus on core coffee products, better pricing and faster service.

Global sales and foot traffic in the same store fell 4% and 6%, the fourth equal quarter of such a decline. The average ticket size rose 3%.

North America and sale of the same store fell 4% years over years, while foot traffic fell 8%, partially offset by a 4% jump in average ticket.

As part of Niccol’s efforts to improve Starbucks’ value proposition, it got rid of extra fees for non -milk milk and stopped price increases.

The operating margin was concluded by 390 basic points in the quarter, partly driven by “degradation and investment” in Niccol’s strategy and in store salary, benefits and hours.

In the past year, the Starbucks share has achieved 5%, which is far in the S&P 500s (^GSPC) 24% increase. But the shares have risen 32% in the last six months after Niccol was announced as the new CEO in August.

Here are results for the first quarter of the financial year 2025 compared to what Wall Street expected, per. Bloomberg -Consensus estimates:

• Sale of the same store: -4% against -5.30%

• Foot Traffic: -6% against -7.28%

• Ticket Growth: 3.0% against 1.87%

The story goes on

“We are still (i) very, very early … laps of this turning story,” Bigttig -Analyst Peter Saleh told Yahoo Finance. “You will start to see more momentum … as we enter the back of this year and then into the financial year 2026” when it comes to sale of the same store, margins and earnings.

During the quarter, the company opened 113 stores in North America and 264 stores internationally.

Analysts are also focused on the ongoing saga on his Chinese business. The US and China make up 61% of the company’s portfolio with 17,049 and 7,685 stores in the two countries respectively. Starbucks has struggled with sales in China in the middle of a stagnant domestic economy and fierce local competition.

Earlier this month President of Starbucks China, Belinda Wong, retired. Her compensation has not yet been announced.

The company has undergone a number of changes. Earlier this month, Starbucks announced the implementation of a Coffee code codeWhere only paying customers can sit in the store and use the toilet. It also said the company’s redundancies to “operate more efficiently” will be announced in early March.

There are also others shaking among the leadership ranks as leaders of a long time depart and teams are reorganized.

This story breaks and is being updated.

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Brooke Dipalma is senior reporter for Yahoo Finance. Follow her on Twitter on @Brookedipalma or e -mail her at [email protected].

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