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Key Takeaways
- Starbucks reported $9.1 billion in revenue, less than analysts’ expectations, also missing expectations for net income and same-store sales.
- The java giant’s stock fell in late trading shortly after the results were released.
- CEO Brian Niccol said the coffee chain would work hard to lure back customers.
Starbucks (SBUX) reported declining sales in its most recent quarter, ending its fiscal year on a down note.
The coffee chain’s net revenue fell 3% to $9.1 billion, while comparable store sales dropped 7% in the final quarter of the year, Starbucks said. Earnings per share came in at 80 cents. Wall Street expected diluted earnings of 92 cents per share on $9.2 billion in revenue, according to consensus estimates compiled by Visible Alpha, along with a 5% drop in same-store sales.
CEO Brian Niccol, who joined from Chipotle (CMG) last month, said Starbucks was working on bringing back consumers.
“My experience tells me that when we get back to our core identity and consistently deliver a great experience, our customers will come back,” Niccol said. “We have a clear plan and are moving quickly to return Starbucks to growth.”
Shares fell about 1% in late trading. Prices dove down to roughly $72 in May when Starbucks downgraded its expectations for 2024, but have recovered since, closing Wednesday at above $97.
Wednesday’s earnings extend a period of sluggish sales. Comparable store sales fell 3% in the third quarter, and dropped 4% the quarter before that.
The coffee giant announced last week that it wouldn’t release projections for 2025 as a way to give Niccol time to acclimate to his new job. Analysts expect Starbucks to generate $38.4 billion in revenue and $4.1 billion in profit through September 2025, when its fiscal year ends, according to Visible Alpha. Wall Street foresees same-store sales increasing 1.8% during that period.
Niccol took the helm of Starbucks in September as activist investors circled. Starbucks has since said it would enforce office attendance rules and make its cafes more inviting gathering places.