The coffee giant experienced a 4% drop in global comparable store sales during the last quarter of 2024, with notable decreases in key markets such as North America and China.
In its fiscal first quarter ending December 29, 2024, Starbucks reported a 4% decline in global comparable store sales. This downturn was mirrored in North America, including the U.S., where sales also fell by 4%. In China, a significant market for the company, sales decreased by 6%.
Despite these challenges, the company’s revenue remained steady at $9.4 billion, matching the figure from the same period the previous year. However, earnings per share saw a 23% decline, dropping to $0.69 from the prior year’s equivalent quarter.
Under the leadership of CEO Brian Niccol, who took the helm in September 2024, Starbucks has initiated a “Back to Starbucks” turnaround plan aimed at revitalizing the brand and improving financial performance. Key strategies include simplifying the menu, enhancing service efficiency, and reintroducing in-store elements like ceramic mugs to create a more inviting atmosphere.
These efforts have been met with cautious optimism. The reported 4% decline in same-store sales was slightly better than analysts’ expectations, which had anticipated a 4.6% drop. Following the earnings announcement, Starbucks shares experienced a 4% uptick in after-hours trading, reflecting investor confidence in the company’s strategic direction.
As part of its growth strategy, Starbucks opened 377 net new stores during the quarter, bringing its global total to 40,576 locations. The company remains focused on enhancing the customer experience and operational efficiency to drive future growth.
