Starbucks (SBUX) Q1 2025 Earnings

Starbucks On Tuesday reported That the sale of the same store slipped for the fourth quarter in a row, but the company’s quarterly earnings and revenue beats Wall Street’s expectations.

The coffee giant started a turnaround plan last quarter in the hope of reviving its US business that has fallen in the past year.

“While we have room for improvement, we make progress as planned and have confidence that we are on the right track,” said CEO Brian Niccol in one Video released On the company’s site Tuesday afternoon.

He added that the company has seen a “positive answer” to the early steps it has taken. These adjustments have included the removal of additional fees for the options without milk, which focuses on its marketing on its coffee and cuts 30% of its food and drinks at the end of the financial year 2025.

Here’s what the company reported compared to what Wall Street expected, based on a study of analysts of LSEG:

• Earnings per Stock: 69 cents vs. 67 cents expected
• Revenue: 9.4 billion dollars against $ 9.31 billion expected

Starbucks reported fiscal net income attributable to the company of $ 780.8 million, or 69 cents per year. Share, down from $ 1.02 billion or 90 cents per share. Stock, a year earlier.

The company’s net sales at $ 9.4 billion was unchanged from a year earlier.

Starbucks’ sale of the same store fell 4%, driven by a 6% fall in traffic to its stores. Wall Street expected a steeper drop of 5.5%, according to Streetaccount Estimates. Both its US and international locations exceeded expectations.

The American sale of the same store slipped 4%as traffic to its cafes fell 8%. Under Niccol, who took the reins in September, the company has tried to turn its American business by coming back to Starbucks “and returning its focus to coffee and the customer experience.

Starbucks also cut down on offer so its reduced transactions dropped 40% During the quarter. Niccol credited the withdrawal in discounts for the chain’s sales improvement throughout the quarter.

Outside of its domestic market, sales of the same store also fell 4%.

Starbucks’ sale of the same store in China, its second largest market, fell 6%, driven by a 4% fall in average ticket. The coffee giant has leaned into discounts in China to compete with rivals that have much lower prices, such as Luckin Coffee.

Niccol said he gave his first visit to the stores in China last week. The company is investigating strategic partnerships to grow its business in the country.

“We treat these experiences and we want to share more as we do,” he told analysts at the company’s conference interview.

In October, the company suspended its forecast for the financial year 2025 with reference to the rotation effort. Tuesday’s call also supported leaders away from a $ 4 billion target in supply chain cost savings by 2028; Niccol’s predecessor Laxman Narasimhan had shared this number in April 2024, just as the sale began to shrink and months before he was out of work.

Starbucks also plans fewer new locations and renovations in the 2025 financial year to free up capital to burn his comeback. However, Niccol sees a strong demand for more cafes in the long term.

“In the US alone, we still see the potential to double our store count as we improve the overall health of our portfolio. We will do this through a strong store renovation program, new store builds and store closures,” Niccol said.

The company is also trying to improve its service speed by planning more workers, removing bottlenecks behind its coffee counters and making Baristas’ job easier.

For example, Starbucks is planning to prioritize the installation of his siren equipment in his busiest locations, Niccol said. The new equipment includes a custom ice cream dispenser, milk dispensing system and faster blenders so baristas can make drinks faster.

Starbucks also pilotes a new algorithm to control the order that baristas must make both mobile and in the store. If successful, the algorithm could solve Starbucks’ crowded pick-up counter that causes frustration for both customers and baristas.

Niccol also has plans for Starbucks’ business working power. He has reorganized the company’s structure, including the division of the role of North American president in two jobs. Earlier on Tuesday, the company announced that it has hired two alumni from Taco Bell, Niccol’s employer before Chipotle.

At the beginning of March, the company plans to dismiss workers, although Starbucks have not yet shared how many jobs will be affected.