Starbucks On Tuesday, it reported the sixth quarter when sales at the store fell as the company implements a turnaround strategy.
CEO Brian Nicole said in a statement that the company's comeback is based on his past experiences, including his conversion. Chipotle Mexican Grill After a series of food safety scandals.
“Our financial results still don't reflect all the progress, but the signs are clear. We're gaining momentum,” Nicole said in a pre-recorded video released in her revenue report.
The company's shares rose 4% in extended transactions.
Based on an analyst survey by LSEG, the company reported the following in the quarter ended June 29, compared to what Wall Street had expected:
Earnings per share: Adjusted 50 cents. It was not immediately clear whether it would rival the expected 65 cents. Expected to 9.5 billion dollars vs 9.31 billion dollars
Starbucks reported third quarter net income attributable to the company, which last year's $1.055 billion, or 93 cents per share, to $558.3 million (49 cents per share).
Excluding restructuring costs and other items, the company has earned 50 cents per share. The one-off investment hosting individual tax items and the company's three-day event for U.S. store managers was 11 cents above the company's earnings per share.
Net sales rose 4% to $9.5 billion.
However, StreetAccount estimates show that sales at the same stores around the world fell by 2%, a steeper decline than the estimated 1.3% decline.
However, Starbucks' North American cafes performed better than expected. Sales at the chain's same North American store fell 2%, down from Wall Street's forecast of 2.5%, according to StreetAccount. Transactions fell 3%, while average tickets rose 1% in the quarter.
“In the US, partner engagement is rising, customer connection scores are rising, shift completions are at record highs, non-Non-Starbucks customer transactions are back to growth, and more coffee houses are offering positive transaction comps,” Nicole said in the video.
During the company's conference call, he told analysts that the company's licensed stores on university campuses showed sales increased in the same store, indicating that younger consumers are reuniting with the brand.
To revive our customers, Starbucks is doubleping our hospitality. The chain is rolling out a “Green Apron Services” program that emphasizes customer interactions. Executives say the program was successfully tested and led the company to accelerate its deployment.
The chain is also building a new US location that focuses on improving the current cafe. In recent years, Starbucks has removed seats from many cafes, citing a move to mobile orders and drive-slot transactions. However, Nicole wants to replace thousands of removed seats as part of a broader effort to make the cafe comfortable again.
In China, the company's second largest market, Starbucks reported the same store sales growth rate of 2% for the quarter. Transactions rose 6%, but average tickets fell. Starbucks is lowering the prices of Chinese drinks and is competing better with lower priced rivals like Luckin Coffee.
The quarter marked the first year and a half when the company's Chinese business increased sales in the same store. CNBC previously reported that Starbucks could be valued at up to $10 billion overall, as pressures are under increasing competition, weak economics, relying on struggling US businesses to distractions and distractions from struggling US businesses.
“We have been attracting a lot of interest from over 20 stakeholders and are evaluating the options,” Nicole told analysts. “We remain committed to our Chinese business and want to maintain meaningful interests.”
Heading into the final quarter of the company's fiscal year, Chief Financial Officer Kathy Smith said the company is “conservative” about what Starbucks' results would look like in the fourth quarter compared to the same period last year. She cited an uncertain consumer environment, but she also noted the company's excitement about its upcoming innovation and the return of the pumpkin spice latte.
Smith said Starbucks will invest in $500 million in labor over the next year, including rolling out its “Green Apron Services” program.
Starbucks repeated its full-year forecast in October just months before Nicole took the company's reins and Smith joined the company.
Looking forward to 2026, Starbucks has big plans. Nicole said the chain will fire protein cold foam, improved artisan food options, coconut water-based drinks, a new Starbucks app and a “refreshed” rewards program.
The company is expected to hold Investor Day in the second quarter of 2026.